Bridgewater Associates’s Shanghai-based wholly foreign-owned enterprise (WFOE) received approval from the Asset Management Association of China’s (AMAC) last week for the Bridgewater All Weather Enhanced China Private Securities Investment Fund No 2, according to AMAC records.
The product is the hedge firm’s second private fund management (PFM) product in the mainland, the first one receiving approval from the AMAC in 2018.
A PFM licence enables foreign entities to develop and sell funds investing in onshore assets to domestic qualified investors, which include institutional and high net worth individuals.
Managed by Joanna Sun Alpert, the new product was launched in mid-September, with a one-year lock-up period, and China Merchants Securities is the distributor, according to Shanghai-based media publication Jiemian.
The fund primarily targets wealthy individuals and the subscription threshold is RMB 5m ($736,500), with a minimum top-up of RMB 1m. The annual management fee is 0.65% of AUM, and the fund also charges a 10% performance fee, which is paid quarterly.
Both of the two PFM products adopt the so-called “all weather strategy” together with an active management approach, the publication noted.
The all weather strategy aims to perform well during both favorable and unfavorable economic and market conditions. All weather funds typically have flexible investment strategies that allow them to diversify across asset classes and use various tactics, such as sector rotation or macro-hedging, in order to cope with different market conditions.
As of the end of July this year, after deducting performance fees, the first PFM product returned 22% annually, which was equivalent to the performance of the CSI 300 at the time, the publication noted.
Bridgewater’s Shanghai WFOE was set up in 2016 and received approval from the AMAC for a PFM license in 2018. The WFOE has 26 staff now, with registered capital of RMB 310m, which was increased from RMB 120m in December last year, according to AMAC and the publication.
Founded by Ray Dalio in 1975, Bridgewater manages global assets of $160bn for 350 institutions, the publication noted.
Other foreign hedge funds have entered China’s PFM market, including Paris-based Metori Capital Management, US-based Two Sigma, and the UK’s Winton Capital, DE Shaw and Man Investments.
In total, around 30 foreign asset managers have been granted PFM licences, with at least 90 PFM products having been approved by the AMAC, according to its records.
