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Chinese quants look to international expansion

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Increased domestic scrutiny by Chinese regulators has prompted several of the country’s data-driven quant trading funds including MS Capital and DH Fund Management to ramp up their international operations, according to a report by Reuters.

MS Capital, which has offices in Shanghai and Singapore, is reportedly starting to offer its China strategy to offshore investors, and also preparing to invest in global markets.

The reports also cites a public filing as revealing that DH Fund Management set up its first offshore fund in March, and unnamed source familiar with the matter as confirming that Beijing-based Ubiquant has plans to open a US office.

While Chinese quant hedge funds have long operated in overseas markets, their rate of international expansion is increasing as operating in domestic markets has become more difficult due to increased regulation of their activity.

The report quotes Filippo Shen, the China Chief Representative of Dutch asset manager Privium Fund Management (HK) and helps Chinese funds build, global brands, as saying: “Under the current compliance rules in China, some quant strategies don’t work, or cannot deliver the best performance at home.”

As a result some quant funds are setting up their second investment centre in Hong Kong or Singapore, according to Shen, where they can operate their strategies more freely.

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