Bloomberg – Wealthy Chinese investors are turning to “sunshine” private trusts, the prototypes of hedge funds in the communist nation, as the property market cools, stocks slump and bank-deposit rates fail to match inflation.
China’s private trust-fund assets tripled to 138.3 billion yuan ($22 billion) in the 18 months to Sept. 30, according to the most recent data from the China Trustee Association, while global hedge-fund assets have stalled at around $2 trillion. The sunshine funds are exempt from some rules placed on Chinese mutual funds, even as limitations such as a ban on short selling means they can’t operate as hedge funds in the same way managers in Hong Kong, London and New York can.
