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cailianshe news, september 17 (reporter yan jun)quantitative private equity is actively seeking to go overseas.

recently, an agenda for a domestic quantitative private equity roadshow in hong kong was circulated on social platforms, and was ridiculed: quantitative private equity is also going to form a group to go abroad to "make money."

cailianshe reporters confirmed the authenticity of the roadshow from multiple sources. it is reported that nearly 20 quantitative private equity institutions participated in the roadshow, with management scales ranging from several top private equity firms with hundreds of billions to mid-tier institutions. the roadshow was divided into two sessions, one in singapore and one in hong kong.

"one in singapore on september 10 and another in hong kong on september 12 were both small-scale communications between quantitative private equity funds and investors. they are regular activities aimed at showcasing the development of domestic quantitative institutions and increasing exchanges," said a person familiar with the matter.

photos of the roadshow circulated online

"foreign investors don't know much about the mainland, especially singapore. in recent years, singapore has added a lot of family offices. on the day of the roadshow, many family offices and old sovereign funds came. some investors met domestic quantitative managers for the first time and lacked basic understanding of domestic quantitative and a-shares." an informed source told cailianshe reporters that the singapore market was more about popularization, while investors in hong kong were relatively enthusiastic. foreign capital was also paying close attention to how to make early arrangements under the variables of the federal reserve's interest rate cut and the undervaluation of a-shares.

four major reasons prompted quantitative private equity to go overseas

in the past year, quantitative private equity has been controversial in china, and most quantitative private equity firms have turned to a low profile in china. as for the reasons for organizing overseas roadshows, based on the feedback from many quantitative private equity firms, there are four main reasons:

first, against the backdrop of the federal reserve's interest rate cuts, quantitative private equity has captured signs of capital inflows and hopes to understand changes in the attitudes of investors in singapore, hong kong and other countries.

"investors look at yields. as the fed cuts interest rates, overseas asset targets become less attractive. if there is any fluctuation in yields, they will take action. this is a relatively optimistic change for investors," an executive at a quantitative agency told cailianshe.

second, there is a shortage of incremental funds in the mainland, and actively expanding overseas markets has become a focus of securities firms, private equity firms and other institutions.

a quantitative person said that the recent decline in a-share trading volume, insufficient trading activity, and insufficient incremental funds are realistic problems. in the multiple corrections this year, the scale of quantitative private equity has declined significantly, so it is necessary to introduce funds from abroad to find another way out for the company. "we have a branch in hong kong and have been working in overseas markets. participating in such roadshows is also a routine business. if overseas us dollar funds are introduced, it can also increase the activity of the market to a certain extent."

third, overseas funds have not completely left the a-share market and have been on the sidelines.

some quantitative experts pointed out that foreign capital has been waiting and watching china. a-shares have good targets and have reached a good position in the long run. the reason for foreign capital's hesitation is "when can it stabilize and rebound", but some foreign capital is relatively optimistic and believes that it is time to make a left-side layout in a-shares.

fourth, quantitative private equity seeks transformation and explores business iteration.

for the leading domestic quantitative private equity institutions, it is now time to try to go global. the interviewees pointed out that from the perspective of the company's planning, applying for overseas asset management licenses and setting up overseas offices to raise funds for a-shares is only the first step. in the future, they may also expand to market real trading outside of a-shares to truly achieve global market allocation.

a quantitative private equity firm said that this was its first overseas roadshow and it was very rewarding. on the one hand, it helped them understand the characteristics of investors in singapore, hong kong and other places; on the other hand, it also communicated with peers to understand their ideas for overseas layout.

the investors are mainly chinese-funded institutions and local family offices.

what was the feedback on the scene? the quantitative private equity firms participating in the roadshow said that each roadshow lasted about 10 minutes, and investors would freely communicate after the roadshow. "after the discussion, the overall feeling was that overseas interest rates were too high. institutional funds basically wanted to be stable. investors could get higher returns on us dollar bonds, and were not willing to take risks at present." a quantitative private equity firm said that investors were more interested in the development of domestic quantitative institutions.

a quantitative private equity investor who participated in both events said that the investors in singapore and hong kong are slightly different. in singapore, there are fewer institutional investors, but they are mainly family offices, wealth centers and established sovereign investment institutions. they don’t know much about domestic quantitative institutions and their psychological expectation is to get to know the institutions first.

"in terms of investment scope of singaporean investors, u.s. stocks and u.s. bonds are the mainstream, which also includes some cryptocurrencies, and there is less allocation to a-shares." a leading quantitative private equity institution said that to be honest, foreign capital's current quantitative investment in asia is more inclined towards japan and india, but the overall communication feels that singaporean investors are more interested in a-shares than hong kong investors.

in the hong kong market, the types of investors are more diverse, includingubsthere are large international institutional investors, hong kong family offices, and institutional investors with chinese backgrounds. they all focus on two things: one is the advantages of the institution’s own unique strategies relative to its peers; the other is the health of the company’s operations.

a person from a quantitative institution said that they met with various investors in hong kong during the mid-autumn festival after the roadshow. the significant difference between these institutions and domestic investors is the long-term nature of their funds and their higher tolerance for drawdowns after investment. therefore, they pay more attention to the consistency of strategies, the stability of the team and the soundness of operations.

nearly 100 private equity firms have obtained hong kong type 9 licenses

a quantitative private equity firm that has just submitted an application for hong kong's type 9 license told cailianshe reporters that at the current time, the company is eager to go overseas, but due to market environment issues, going overseas also faces very great challenges, and the boss also regards it as a second venture.

hong kong license no. 9, that is, the financial license no. 9 issued by the hong kong securities and futures commission, can provide asset management services. license no. 9 is similar to the domestic private equity license. for an institution, obtaining a license no. 9 means obtaining a pass in the international capital market.

earlier, the media cited data from private equity ranking network showing that as of august 5, 98 domestic private equity institutions had obtained the "hong kong type 9 license", of which 33 were head private equity firms with a scale of more than 5 billion yuan. among them, there are subjective longs such as jinglin asset, danshuiquan, qianhe capital, yingfeng capital, and oriental harbor, as well as quantitative institutions such as jintech, huanfang, mingquan, longqi, and jiukun.

recently, macroeconomist tao dong joined dan shui quan (hong kong) as president. according to news from dan shui quan, after joining, tao dong will empower investment and customer service from a global macro research perspective.

danshuiquan currently holds hong kong licenses no. 1 (securities trading), no. 4 (providing advice on securities) and no. 9. tao dong was a director of the china chief economist forum, chief economist of credit suisse, and vice chairman of asia pacific wealth management greater china. he joined ubs after the acquisition of credit suisse and served as executive vice chairman of ubs wealth management. tao dong has been based in hong kong since 1994. from the outside, it seems that danshuiquan values ​​his familiarity with the hong kong market.

it is easy to apply for a license, but it is not easy to advance the business. some quantitative private equity firms said that although they have applied for a license, their business has not yet started, and the main problem is the difficulty in raising funds.

"the a-share market has been adjusting continuously. it is foreseeable that it will be difficult to attract us dollar investment in hong kong. some institutions have been planning for two or three years and currently have only 2 million us dollars under management." the above-mentioned person pointed out that the overseas roadshow fundraising is just a test of the waters. in the process of communicating with investors, the company is also sorting out the path to conduct business overseas in the future.