Key Takeaways
- • Lingjun Capital, the Hong Kong unit of Beijing-based quant fund Lingjun Investment, has attracted at least $300 million from a US institutional investor and several Southeast Asian clients, according to chairwoman and founder Cai Meijie.
- • The firm is in advanced talks for a $150 million allocation from a Southeast Asian sovereign wealth fund and is actively marketing its strategies to Middle East investors.
- • Lingjun's assets fell to roughly 50 billion yuan ($7.49 billion) after Shanghai and Shenzhen exchanges barred it from trading for three days in early 2024 for rule violations, down from a peak of 100 billion yuan ($14.98 billion).
- • The flagship equity fund returned more than 70% last year and gained over 10% in the first nine months of this year, per fund distributor Simuwang.com, versus the CSI 300's 18% gain last year and 6% decline year-to-date through September.
- • Cai attributes renewed global interest in Chinese quant strategies to AI-driven innovation and the success of DeepSeek, and says the firm has added risk management, embedded risk checks and a five-member investment committee.
Summary
Beijing-based quant fund Lingjun Investment's offshore arm has attracted at least $300 million from US and Southeast Asian investors as it resumes fundraising two years after Chinese regulators restricted its trading, according to Reuters. Cai Meijie, chairwoman and founder of Lingjun, told Reuters that the Hong Kong unit, Lingjun Capital, has secured more than $300 million from a US institutional investor and several Southeast Asian clients.
The firm is also in advanced talks for a $150 million allocation from a Southeast Asian sovereign wealth fund and is actively marketing its strategies to investors in the Middle East, Cai said. Lingjun regained access to international capital as global interest in China's quant sector has been reignited by AI-fuelled innovation and better return prospects following improved risk controls, Reuters reported.
Lingjun's assets fell to around 50 billion yuan ($7.49 billion) after the Shanghai and Shenzhen stock exchanges barred it from trading for three days in early 2024 for breaking rules. The action came amid a broader Chinese regulatory crackdown on quantitative funds, which regulators blamed for exacerbating a market selloff. At its peak, Lingjun managed 100 billion yuan ($14.98 billion), making it one of China's top four quant funds before the crackdown.
Cai said the firm conducted no fundraising for two years, restarting onshore fundraising in March and overseas fundraising only recently, to test whether its reforms were effective. She acknowledged that governance had been insufficient at the time and described the regulatory action as a "hard-learned lesson." Measures since then include doubling the risk-management team, embedding risk checks into trading systems and forming a five-member investment committee to standardise decision-making.
Performance data from fund distributor Simuwang.com shows Lingjun's flagship equity fund was among China's top-performing hedge funds last year, returning more than 70%, and gained more than 10% in the first nine months of this year. Over the same periods, the CSI 300 rose 18% last year and fell 6% through September. Cai linked improved perceptions of Chinese quant funds to the success of DeepSeek, the AI startup incubated by quant fund High-Flyer, which she said has sparked a re-rating of Chinese assets.
The firm is also in advanced talks for a $150 million allocation from a Southeast Asian sovereign wealth fund and is actively marketing its strategies to investors in the Middle East, Cai said. Lingjun regained access to international capital as global interest in China's quant sector has been reignited by AI-fuelled innovation and better return prospects following improved risk controls, Reuters reported.
Lingjun's assets fell to around 50 billion yuan ($7.49 billion) after the Shanghai and Shenzhen stock exchanges barred it from trading for three days in early 2024 for breaking rules. The action came amid a broader Chinese regulatory crackdown on quantitative funds, which regulators blamed for exacerbating a market selloff. At its peak, Lingjun managed 100 billion yuan ($14.98 billion), making it one of China's top four quant funds before the crackdown.
Cai said the firm conducted no fundraising for two years, restarting onshore fundraising in March and overseas fundraising only recently, to test whether its reforms were effective. She acknowledged that governance had been insufficient at the time and described the regulatory action as a "hard-learned lesson." Measures since then include doubling the risk-management team, embedding risk checks into trading systems and forming a five-member investment committee to standardise decision-making.
Performance data from fund distributor Simuwang.com shows Lingjun's flagship equity fund was among China's top-performing hedge funds last year, returning more than 70%, and gained more than 10% in the first nine months of this year. Over the same periods, the CSI 300 rose 18% last year and fell 6% through September. Cai linked improved perceptions of Chinese quant funds to the success of DeepSeek, the AI startup incubated by quant fund High-Flyer, which she said has sparked a re-rating of Chinese assets.
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