Key Takeaways
- • China International Capital Corp (CICC) is preparing to launch a $500m fund of hedge funds targeting international investors, according to Bloomberg, with the vehicle possibly launching as early as November.
- • Roughly half of the capital is expected to go to fundamental equity and quantitative hedge funds in Greater China, with the remainder spread across multistrategy and macro managers, and a mandate extending to Japan and other Asia-Pacific markets.
- • The fund targets university endowments and family offices in Hong Kong, Europe, the US and the Middle East, alongside a commitment from CICC itself.
- • CICC's capital advisory team reports a 12.7% annualised return on its proprietary hedge fund investments between July 2023 and August 2026, with no calendar-year losses, per marketing materials reviewed by Bloomberg.
- • The launch comes amid volatility in Chinese equities, with the CSI 500 Index down about 11% this year while the MSCI Asia-Pacific Index has gained more than 11%.
Summary
China International Capital Corp is preparing to launch a $500m fund of hedge funds aimed at international investors, according to a Bloomberg report. The vehicle, to be run by the Chinese investment bank's capital advisory solutions team, could launch as early as November. Allocations will focus primarily on Greater China and Asia-Pacific equity strategies.
According to the report, approximately half of the capital is expected to go to fundamental equity and quantitative hedge funds operating in Greater China. The remainder will be diversified across multistrategy and macro managers. The mandate will also extend to other Asia-Pacific markets, including Japan, to reduce geographic concentration. The fund will target university endowments and family offices in Hong Kong, Europe, the US and the Middle East, alongside an investment from CICC itself.
CICC's capital advisory team has researched global hedge funds since 2016 and has allocated proprietary capital to between 15 and 20 managers simultaneously since 2020. Per marketing materials reviewed by Bloomberg, the team screens more than 500 funds annually and conducts detailed assessments of roughly 10% of them. Its proprietary hedge fund investments generated an annualised return of 12.7% between July 2023 and August 2026, with no calendar-year losses during the period.
The proposed launch follows growing international interest in Chinese hedge funds, supported partly by developments in domestic artificial intelligence technology. Meridian & Saturn Capital, a quantitative manager, secured a $1bn mandate from a Middle Eastern sovereign wealth fund earlier this year. Qube Research & Technologies expanded its China long-only strategy more than tenfold in the year to January.
The fundraising plans come against a backdrop of continued volatility in Chinese equities. The CSI 500 Index is down approximately 11% this year amid concerns over economic growth and AI-related earnings, while the broader MSCI Asia-Pacific Index has gained more than 11% despite recent market turbulence.
According to the report, approximately half of the capital is expected to go to fundamental equity and quantitative hedge funds operating in Greater China. The remainder will be diversified across multistrategy and macro managers. The mandate will also extend to other Asia-Pacific markets, including Japan, to reduce geographic concentration. The fund will target university endowments and family offices in Hong Kong, Europe, the US and the Middle East, alongside an investment from CICC itself.
CICC's capital advisory team has researched global hedge funds since 2016 and has allocated proprietary capital to between 15 and 20 managers simultaneously since 2020. Per marketing materials reviewed by Bloomberg, the team screens more than 500 funds annually and conducts detailed assessments of roughly 10% of them. Its proprietary hedge fund investments generated an annualised return of 12.7% between July 2023 and August 2026, with no calendar-year losses during the period.
The proposed launch follows growing international interest in Chinese hedge funds, supported partly by developments in domestic artificial intelligence technology. Meridian & Saturn Capital, a quantitative manager, secured a $1bn mandate from a Middle Eastern sovereign wealth fund earlier this year. Qube Research & Technologies expanded its China long-only strategy more than tenfold in the year to January.
The fundraising plans come against a backdrop of continued volatility in Chinese equities. The CSI 500 Index is down approximately 11% this year amid concerns over economic growth and AI-related earnings, while the broader MSCI Asia-Pacific Index has gained more than 11% despite recent market turbulence.
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