Private Funds in China Post 1.68T Yuan Expansion in 2018 Despite Heavy Liquidations

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Official data from China’s peak body for the asset management sector points to a surge in assets under management amongst privately offered funds despite turmoil on the Chinese A-share market and a heavy spate of liquidations in 2018.

Figures released by the Asset Management Association of China (AMAC) on 23 January indicate that as of the end of 2018 the assets of privately offered funds had reached 12.78 trillion yuan, for a surge of 1.68 trillion yuan, or 15.12%, compared to 2017.

China was host to 74,642 registered privately offered funds as of the end of 2018, for an increase of 8224, or 12.38%, compared to the preceding year, and 24,448 registered fund managers, for an increase of 2002, or 8.92%, compared to 2017.

The number of privately offered funds worth 10 billion yuan or more saw an increase of 47 in 2018 to reach 234 in total.

274 funds had assets under management of between 5 – 10 billion yuan, for an increase of 36 compared to 2017, while 671 had assets of between 2 – 5 billion yuan, for an increase of 72.

Given turmoil on China’s A-share market in 2018, private equity investment funds saw a total contraction of 46.7 billion yuan last year to 2.24 trillion yuan, despite their total numbers increasing by 3472 to reach 35,688.

Equity venture private funds emerged as a primary driver of growth in Chinese private funds however, with a full year increase of 1.51 trillion yuan in 2018 to reach 8.6 trillion yuan, and a YoY increase in their numbers of 5219 to reach 33,684 in total.

China also saw a heavy spate of fund closures in 2018, with 13,981 liquidations of private funds that year alone, bringing the cumulative total to 28,697 by the end of December.

China’s privately offered funds remain heavily concentrated in just several key provinces and cities, with Shanghai, Shenzhen, Beijing, Zhejiang (excluding Ningbo) and Guangdong (excluding Shenzhen) accounting for 71.68% of all registered private fund managers as of December 2018.

China’s top five locations for registered private fund managers

No. Name of jurisdiction Number of private fund managers Number of funds Assets under management (trillion yuan)
1 Shanghai 4806 20,524 2.7378
2 Shenzhen 4629 13,523 1.7955
3 Beijing 4356 13,561 2.9938
4 Zhejiang (excluding Ningbo) 2071 6,092 0.7442
5 Guangdong (excluding Shenzhen) 1662 4,298 0.5624

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