Placement agency paves route to renminbi investment

US placement agency CP Eaton Partners is positioning itself for the eventual opening of the alternative funds industry to renminbi-denominated funds in China with a hiring of an experienced local expert.

Eric Gu has joined CP Eaton's Shanghai representative office from the China National Social Security Fund where he helped design the overseas alternative investment strategy and participated in the manager selection process for hedge funds, private equity, real estate and infrastructure strategies.

David Love, who oversees the company's Asia operations, said CP Eaton had raised over $3 billion for Asian clients since the Shanghai office was established in 2007 for investment in funds of funds, growth capital and real estate.

Love said CP Eaton would continue to source capital for western clients in Asia. Gu would begin the process of developing a renminbi fund raising capacity for Western and Chinese fund managers across the alternative investment industry, including hedge funds.

"We're in an exploratory phase," Love said. He said the company was watching private equity companies such as Carlyle, KKR and Blackstone who had already announced they would raise renminbi funds.

Love said CP Eaton did not know how active it would be in raising renminbi for hedge funds. If a market developed it wanted to be able to take advantage of any opportunities.

At present China limits investment in alternatives such as hedge funds and it is difficult for hedge fund managers outside the country to market their products in China.

See the May issue of Hedge Funds Review for more on marketing and distributing hedge funds to Chinese investors.