New York (HedgeCo.net) – The only thing growing faster than the Chinese stock market is the Chinese hedge fund market. With the Shanghai Composite Index up almost 60% in 2015, the incredible bull market has launched a meteoric rise in the number of hedge funds and private equity funds in China.
According to a recent Financial Times article, there have been over 4,000 new funds launched in the last three months. The article quotes the number of funds as 12,285 at the end of May after having only 7,989 at the end of February and those numbers are from the Chinese regulatory agency.
Such euphoria is reminiscent of the growth in tech related mutual funds in the late ‘90s, but hopefully the end result is better for the Chinese market than what we saw from the tech sector in the states during the 2000-2002 bear market. In case you have forgotten, the tech-laden Nasdaq Composite Index lost over 75% of its value and the Nasdaq 100 index lost over 80%.
The shift in assets is impacting traditional investment firms because of the amount of assets leaving and heading to hedge funds.