Big Hedge Fund Bridgewater Approved to Set Up Shanghai Subsidiary
Company registers with $7.6 million in capital
By JAMES T. AREDDY
Updated May 16, 2016 10:59 p.m. ET
SHANGHAI—The U.S. hedge fund Bridgewater Associates recently won approval to register a wholly owned subsidiary in Shanghai, providing new access to China’s often volatile financial markets for the large firm.
Bridgewater founder Ray Dalio registered Bridgewater (China) Investment Management Ltd. on March 7 with capital of 50 million yuan ($7.6 million), according to a filing at the Shanghai office of the State Administration for Industry and Commerce. Z-Ben Advisors, a Shanghai market research firm that tracks the investment-fund industry, pointed to the new registration in a report published on Monday.
Bridgewater couldn’t immediately be reached.
Another filing at the commercial bureau showed that the name adopted by Bridgewater for its subsidiary was approved in October, as China was still recovering from severe midyear stock-market turmoil and a devaluation of the yuan. Though foreign-run hedge funds in China are rare, the industry came in for a drubbing by Chinese officials who said foreign traders had added to the market volatility.
Bridgewater may plan to service Chinese institutional clients with its new Shanghai office, Z-Ben said. But the market-research firm said the likelier scenario is that Bridgewater will take advantage of opportunities recently granted by Chinese authorities to permit foreign institutions to more easily trade the country’s yuan-denominated debt securities.
“While there are concerns over credit quality in certain segments, China still does offer comparatively high-quality bonds and with decent yields,” Z-Ben said in its report.
Bridgewater’s 20-year license is technically within the Shanghai free-trade zone, which today includes all of the city’s Pudong district. The firm’s registered address is in an office tower in the Lujiazui financial district.
The approval comes as many commercial bureaus around China have stopped taking applications from firms seeking to establish businesses that operate in the financial sector, though that policy appears aimed mostly at stopping a proliferation of smaller investment firms.
Z-Ben said the Bridgewater approval is likely to encourage other firms to consider whether they should look at the China market.
“What this will most likely mean is continued frustration among global managers when it comes to understanding what is actually possible,” the note said.
—Yang Jie in Beijing contributed to this article.
http://www.wsj.com/articles/big-hedge-fund-bridgewater-approved-to-set-up-shanghai-subsidiary-1463384986
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(editorial thought by JJP... Just about no comment in the financial press regarding Bridgewater setting this up this Foreign owned operation and it has no chinese partners...... The cost of establishing it strikes me as very very reasonable... actually a downright steal, in that $7.6 million dollars in the world where the $160 Billion in assets Bridgewater runs, is less than they spend on the high tech coffee/ tea machines they have as a benefit to employees. ...... China is the world's 3rd largest Debt Market and so this business initiative imo has an excellent risk/reward profile.
In a world hungry for yield, there are Chinese debt instruments that should offer 300 plus basis points of return. The Bridgewater license is technically within the Shanghai free-trade zone. Looks to me like a brilliant move.
Dalio comes from a fixed income background, as does Blackrock CEO Larry Fink, and innumerable other really saavy Capital markets CEO's , executives and best of breed asset managers.) |
