The second foreign-funded 100 billion private equity "rises": from Bridgewater's solo dance to the competition of the two giants

At the end of the year, the private equity market usually enters a relatively quiet phase.

However, while most institutions are busy wrapping up, reviewing, and slowing down, an unexpected fundraising action has revealed unusual signals on the channel side.

Information from the channels indicates that a top foreign private equity firm is re-launching fundraising in the mainland market through its flagship product, aiming to join the ranks of foreign private equity institutions with over 10 billion yuan in assets.

Has foreign quantitative investment in China finally moved past the exploratory stage?

Year-End Fundraising

On December 15, foreign private equity firm Tengsheng Investment initiated a new round of product fundraising in the mainland market.

According to Zhi Shi Tang, this fundraising is being distributed by leading brokerage channels such as CITIC Securities and CICC Wealth. This is also Tengsheng's concentrated fundraising action towards the market since it started issuing related products in early November.

In the onshore development path of foreign private equity, the choice of channels often carries more informational content than the fundraising rhythm itself. Collaborating with top institutions like CITIC Securities and CICC Wealth is almost a "standard move" for most foreign asset management firms entering the Chinese market.

It is reported that the products being raised by Tengsheng Investment are primarily based on the CSI 500 Index enhancement strategy, with a small allocation to commodity futures CTA strategies.

In simple terms, in this combination-designed product, the CSI 500 Index enhancement can be seen as the base, while the CTA strategy plays the role of smoothing returns.

It can be seen that this foreign private equity firm does not intend to fully immerse client funds in high-frequency trading rhythms but rather chooses a slower approach, where the index is responsible for return direction and the CTA is responsible for buffering.

Due to limited information, we cannot ascertain the specific circumstances of Tengsheng Investment's latest round of fundraising.

What Background?

According to registration documents, Tengsheng Investment was established in November 2018 and is a wholly foreign-owned private securities manager set up by Two Sigma in mainland China. Its business system is responsible for the onshore implementation of the parent company's quantitative strategies in the Chinese market.

Two Sigma has long been a core player in the global quantitative hedge fund arena, with assets under management once reaching the hundreds of billions of dollars.

However, this institution has been in a state of "unstable narrative" in recent years.

Due to internal governance issues, Two Sigma has attracted the attention of overseas regulators and underwent rectification. These differences ultimately concentrated at the founder level. The conflicts between the co-founders of the parent company regarding company control and management paths became public and persisted for years, ultimately prompting the company to complete substantial management rights adjustments in recent years.

From the perspective of the onshore platform, Tengsheng Investment's legal representative and general manager is Carissa L Xu, whose career experience exhibits a clear intersection of Chinese and foreign financial systems.

She previously worked at well-known institutions such as Xiangcai Securities, Tianjin TEDA Heyi Fund, UBS Securities, and Fidelity Investments, before joining Two Sigma's Asia-Pacific region and overseeing the overall management of onshore business in the Chinese market.

News of the 10 Billion Private Equity "Spreads"

From the publicly disclosed perspective, Tengsheng Investment currently shows a management scale of 5 to 10 billion yuan in the registration information with the Asset Management Association of China The last update for institutional information was on January 17, 2023, and this scope clearly does not cover the recent business changes.

However, on the channel side, another set of information has emerged.

Before the launch of this agency sales, a related article published by CICC Wealth mentioned that after completing over 1 billion RMB in fundraising in November this year, Tengsheng Investment's asset management scale has officially crossed the 10 billion RMB threshold, ranking second among domestic and foreign private equity firms, only behind Bridgewater China Fund.

This statement is not a formal disclosure from the regulatory authorities, nor is it an official announcement from Tengsheng itself, but rather appears in external content from leading sales channels.

According to previous market news, the onshore RMB assets managed by Bridgewater China are close to 60 billion RMB in scale.

Scale Leap

If we extend the timeline, the scale changes of Tengsheng Investment in the Chinese market itself have reference significance.

In June 2021, a research report from Everbright Securities still assessed Tengsheng Investment's scale to be in the range of 1 to 2 billion RMB.

At that time, such foreign onshore platforms were mostly in a trial operation stage, with limited scale, and had not yet entered the mainstream allocation discussion.

Now, its management scale is clearly described in the hundred billion RMB level, representing a change of more than one order of magnitude. This change did not come from a single event but usually occurs alongside a gradual stabilization of product structure, clarification of channel relationships, and continuous accumulation of client sources.

It is this detail that allows Tengsheng's latest scale status to be "seen" in a more explicit way for the first time.

From an industry perspective, such changes are not uncommon. It is more like foreign private equity firms naturally entering a stage after completing a round of adaptation in the Chinese market.

Completing Local Strategy Adjustment

Research from Zhitang found that from the historical observation of product filing, Tengsheng Investment did not initially anchor to a single direction in the Chinese market but underwent a relatively clear process of strategic trade-offs.

The trade-offs are highly related to the competitive structure of the local quantitative industry.

Since its establishment, Tengsheng has filed three private securities investment funds with the Asset Management Association of China, and the number of products is not large.

The earlier launched Tengsheng China Hanliang Multi-Asset No. 1, established on August 31, 2021, is positioned as a multi-asset strategy and chose to liquidate early after operating for about two years, with relevant information updated in November 2023.

From the results, this is not simply a product failure.

In simple terms, multi-asset strategies are not uncommon in overseas markets, especially suitable for long-term funds and highly institutionalized investors. However, the situation is different in the Chinese private equity market. The main battlefield for local quantitative institutions has long been the quantitative stock selection track.

Generally speaking, quantitative stock selection strategies have clear logic and strong comparability of performance, making it the area where consensus among funds, channels, and managers is formed the fastest.

In such a competitive environment, although multi-asset strategies have advantages in model complexity and theoretical space, they often face the practical problem of being "understandable but difficult to compare" in the Chinese market Subsequently, Tengsheng's product direction began to converge significantly. New registered products gradually returned to the index enhancement framework, with the third product established on April 26, 2023, featuring a more focused strategy profile that is also closer to the core battlefield of China's quantitative private equity, which is the most competitive and mature.

From an industry perspective, such adjustments are not surprising.

For foreign quantitative firms, truly completing onshore operations often does not mean bringing the most complex overseas models, but rather choosing the most scalable expression method while respecting local funding needs and competitive structures.

In this context, Tengsheng's strategic adjustment resembles a foreign quantitative institution that, after completing a reality calibration in the Chinese market, begins to possess an operational form capable of accommodating funds at the scale of hundreds of billions.

Risk Warning and Disclaimer

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