Bridgewater Associates will increase the performance fees for its onshore funds in China, capitalising on strong returns that have attracted significant assets despite ongoing challenges in the country’s RMB5.2tn ($715bn) hedge fund industry, according to a report by Bloomberg.

The report cites sources familiar with the matter as revealing that the firm's Shanghai-based private fund business has informed distributors of its intention to halt subscriptions to existing funds and raise fees for new products. The firm aims to charge a 20% performance fee on returns exceeding 5%, up from the current 10%, although the management fee will remain unchanged.

The adjustment aligns Bridgewater's fee structure more closely with global industry norms, as the firm gains traction with local investors. Earlier this year, Bridgewater increased its onshore assets under management to over RMB40bn ($5.5bn), more than quadruple that of global competitors such as DE Shaw & Co and Two Sigma Investments.

According to data from Shenzhen PaiPaiWang Investment & Management Co, hedge funds managing more than RMB10bn returned an average of 2% in the first five months of the year, with stock funds posting a 1% loss, and multi-asset funds gaining 2%.

Bridgewater’s All Weather Plus No3 fund has delivered an annualised return of 12.7% since its inception in 2021, with a 12.9% return this year through May.