23/05/17

China to lift curbs on foreign fund offshore investments

Launched in 2013, the Qualified Domestic Limited Partnership (QDLP) programme allows foreign fund managers to raise money within a set quota from high net-worth Chinese investors through a wholly-owned onshore fund management company and invest the cash overseas, reports International Adviser.

In 2015, BlackRock became the first traditional asset manager to receive the QDLP licence, joining a handful of other global funds, including Man Group and Och-Ziff Capital Management Group

The programme was suspended in 2015 after China’s stock market crashed and lost around 40% of its value.

Citing sources close to the matter, Reuters has reported that China could lift the suspension as early as June.

One source told the news agency that authorities will be a “little cautious” granting only around half a dozen licences while the quota of funds investable abroad will be slashed from $100m (£77m, €89m) per manager to between $50m and $75m this time round.

The move comes as Beijing shows more flexibility with its economic foreign policy, after easing its crackdown on capital outflows and a weakening of the US dollar.

Earlier this year, China said it is considering lifting the 50% ownership cap on overseas life insurers buying domestic companies in the biggest shakeup of the industry in almost two decades.