New Chinese Hedge Fund Raises Initial Capital Amounting To $150 Million

A new China-focused hedge fund managed by a former Hillhouse Capital Management fund manager has raised between $100 million and $150 million, making it one of the year's most successful debuts for a China-focused fund.

Protium Capital, a long-short equity fund based in Hong Kong, will begin trading in July. Its surprisingly strong start comes at a time when many investors are reducing their exposure to the world's second-largest economy, concerned about trade and political tensions with the United States, as well as a slower-than-expected post-pandemic recovery.

"Opportunities frequently arise when most people are risk-averse," Protium's founder Lu Ning explained.

Long-term, China still has many high-quality enterprises and entrepreneurs, he says.

Billionaire Zhang Lei, founder of Hillhouse, one of Asia's largest alternative investment businesses, has supplied startup funding, while additional investors include Chinese and Asian company leaders, financial institutions, and family offices.

The fund is intended to concentrate its efforts in the technology, industrial, and consumer sectors.

Fundraising for China-focused funds has been particularly challenging this year, with most raising around US$50 million or less, according to industry insiders who declined to be identified because they were not licenced to speak to the media.