The fund allows people on the mainland to tap assets overseas, with investments starting from $150,000, according to Seungha Ku, head of offshore private equity at Beijing-based CreditEase. KKR & Co. and Blackstone Group LP are among the partners for the product, which focuses on consumer, telecommunications, media and technology, healthcare and industrial businesses in North America, western Europe and developed Asia, he said.
“There’s a lot of Chinese investor interest in getting access to diversified asset classes,” Richard Williamson, CreditEase’s co-head of wealth management products, said in an interview. “We sort of see that everywhere. I’d expect that’s a long-term trend.”
Chinese remain eager to pour money into assets abroad ranging from property to insurance as the economy cools and expectations persist that the yuan will keep weakening. The country’s private equity industry is expanding globally at an unprecedented pace, with homegrown funds taking part in at least $16.4 billion of cross-border deals so far this year, exceeding the previous annual record of $11 billion in 2012, according to the Asian Venture Capital Journal.
The fund, which CreditEase started in May, invests in companies directly as well as private equity funds. Representatives from KKR and Blackstone declined to comment.
A separate $80 million pool has invested $50 million in consumer loans from U.S. Internet lenders Prosper Marketplace Inc. and Avant Inc., according to Williamson. The firm has also set up funds focusing on areas such as financial technology and real estate both overseas and in China.
CreditEase distributes products through its 3,200 wealth advisers from about 150 offices in China. The wealth business had more than $6 billion of assets under management at the end of last year. The firm is the majority shareholder of Yirendai, the first Chinese online-loan platform to obtain an overseas listing. Shares of Yirendai have more than doubled in New York trading this year.
Chinese individuals have “heavily skewed” their investments toward domestic assets, much like their U.S. counterparts did in the 1960s and British people did in the 1970s, Williamson said. “If you look at historic precedent in what has happened in other markets, the allocation to offshore actually grows over time.”