China Tightens Controls Over Private Funds in Sweeping Rule Overhaul

Private fund assets under management in China have surged almost eightfold since 2015 to 20 trillion yuan as wealthy investors sought higher returns.

(Bloomberg) — Chinese regulators revamped rules governing its 20 trillion yuan ($2.9 trillion) private fund industry to curb irregularities and risks, a move that’s set to benefit bigger managers including foreign players.

Private equity and hedge fund managers will need at least 10 million yuan of paid-in capital to operate, according to measures published Friday by the Asset Management Association of China (AMAC). That’s about five times the current requirement for funds already in operation. The rules, which take effect May 1, also raise requirements for controlling shareholders and senior management.