Quantitative hedge fund Meridian & Saturn Capital (MS Capital) has secured a $1bn mandate to invest in Chinese equities, highlighting increasing institutional interest in systematic strategies focused on the world’s second-largest market, according to a report by Bloomberg.
The Singapore-based firm said the capital will be deployed through a market-neutral strategy targeting onshore Chinese stocks, according to chief executive and founding partner Kate Zhang.
Zhang did not disclose the identity of the allocator, citing confidentiality agreements, but confirmed it is a Middle Eastern sovereign wealth fund. She added that the investor may expand its commitment further if performance benchmarks are achieved. The structure of the mandate has not been independently verified.
The deal adds to a broader trend of sovereign investors in the Middle East increasing allocations to China-focused quantitative managers. While such flows have been building gradually, the size of this mandate places it among the larger allocations seen in the segment to date.
Recent industry surveys from firms including Goldman Sachs and BNP Paribas suggest global institutional investors are planning to raise exposure to China strategies this year, as volatility in Chinese markets and advances in AI-supported trading systems improve the appeal of systematic approaches.
MS Capital, which manages roughly $1.5bn including an initial $500m investment from the same client, said it is now in discussions with additional Middle Eastern institutions. The firm is also preparing to expand its presence with planned offices in Abu Dhabi, Hong Kong, and the United States.
Zhang said the mandate followed more than a year of intensive due diligence, as the investor sought diversification into Chinese assets and greater use of systematic tools to enhance portfolio performance.
The firm is ultimately controlled by Jude Zhu, a University of Chicago MBA graduate who previously founded Shanghai-based quantitative manager Meridian Global Inc in 2013, according to regulatory filings.
Meridian Global oversees about RMB7bn (around $1bn) in onshore assets, positioning it as a mid-sized player within China’s quant industry. Zhu also founded fintech company Leap Technologies, which provides T+0 trading algorithms designed to capture intraday movements in equities.
As part of the arrangement, the Middle Eastern investor will also integrate Leap’s technology into its broader portfolio strategy. Zhang said the systems have delivered annualised returns of up to around 10% for some clients, typically via brokerage execution channels.
The partnership may also extend beyond China, with the investor reportedly encouraging MS Capital to develop additional strategies for other regions. There are also plans to apply leverage within a separately managed account structure that will incorporate Leap’s algorithmic tools.
Performance data provided by MS Capital shows its market-neutral strategy returned 10.3% last year and 6.2% in the first two months of this year, before global volatility increased following geopolitical tensions. By comparison, China’s CSI 300 index rose about 18% in 2025.
