Lujiazui continues to attract world’s biggest names in asset management
Print Edition
PRIVATE equity firms flocked to Lujiazui in Pudong New Area amid the rise of hedge funds in China. Nearly 1,500 institutions with their names on file with the Asset Management Association of China have set up offices in the 6.89-square-kilometer section of Pudong.
Those who lead the industry have expanded their business to the global market. Lujiazui has also become home court for world-renowned asset management institutions to carry out business in China.
Since Aberdeen Asset Management opened its Shanghai subsidiary last September, prestigious asset management agencies from countries including the United States, France and Japan have or planned to establish their Shanghai branches in Lujiazui.
Lujiazui Financial City is gradually becoming an important platform for financial cooperation between China and the United Kingdom to promote convergence between the domestic and overseas markets, said Ren Kaifeng, Director, Finance and Shipping of Shanghai Lujiazui Financial City.
The next step for Lujiazui is to further integrate financial resources in the region, attract and support more renowned international and domestic asset management institutions to settle down and develop their businesses in Lujiazui to promote China’s asset management industry to go to the global market, according to Ren.
As the core area to implement the construction of Shanghai’s international financial center and the financial reform of Shanghai free trade zone, Lujiazui Financial City has become the most comprehensive financial market system in the region and will become a strategic highland in international capital management, Ren added.
At present, China’s hedge fund industry is developing rapidly. A recent seminar jointly held by Lujiazui Financial City and Hedge Fund Standards Board extensively studied the feasibility of domestic fund managers going to the global market and overseas managers developing their Chinese businesses.
The HFSB is a standard-setting body for the hedge fund industry and acts as custodian of the Hedge Fund Standards.
The HFSB and the Standards are supported by Hedge Fund Managers accounting for over US$1 trillion in American Utility Management. In addition, the HFSB’s Investor Chapter includes over 60 major international investors, including pension and endowment funds, sovereign wealth funds and funds of funds.
The standards are established and updated through a collaborative process that brings together managers and investors to agree on practical, responsible standards of practice in areas such as disclosure, valuation, risk management, fund governance and shareholder conduct.
In this case, the seminar aims to build an exchange platform for domestic and foreign asset management institutions to dock international rules and continuously improve the influence and overall competitiveness of Lujiazui Financial City.
During the seminar, Misha Graboi, partner and general manager of the Irvine, California-headquartered Pacific Alternative Asset Management Company, indicated that current regulatory costs were getting higher and higher.
“Information technology not only brings the opportunity but can also bring the danger,” Graboi said.
“It is necessary to establish industry standards, set a higher access threshold,” he said. “Because the HFSB’s resources can be touched and shared, so that it can help some small businesses to know how to enter the market.”
The number of US hedge funds is 10 times larger than in Asia. But as international cooperations have become closer, in the long run, there are many opportunities in Asia, particularly in China’s mainland, according to Graboi.
Lujiazui Financial City is commited to promoting international exchange and cooperation. A roundtable in June between policy heads and financial bosses from Lujiazui and City of London aimed to enhance Shanghai’s financial cooperation with the UK.
In September, a discussion with International Capital Market Association focused on the integration of China’s capital market and international market. The “Cyber Risk and Secure Finance” forum last month promoted the understanding of cyber risk and facilitated communication and cooperation in combating cyber risk for the financial and insurance industries.
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