China's Lingjun Investment has attracted at least $300 million from US and Southeast Asian investors through its offshore unit, Reuters reported, as the Beijing-based quantitative fund resumes overseas fundraising two years after facing trading restrictions from Chinese regulators.Lingjun Capital, the firm's Hong Kong unit, has secured the funds from a US institutional investor and several Southeast Asian clients, Lingjun Investment founder and chairwoman Cai Meijie told Reuters.
The company is also in advanced discussions for a $150 million allocation from a Southeast Asian sovereign wealth fund and is marketing its investment strategies to investors in the Middle East.The fundraising revival follows a period of regulatory scrutiny that significantly affected the firm's operations. Lingjun's assets fell to around 50 billion yuan ($7.49 billion) after the Shanghai and Shenzhen stock exchanges barred the company from trading for three days in early 2024 for violating trading rules.Read more: Chinese stock market enters bear territory!
CSI 300 index crashes 20% from June peakThe restrictions came amid a broader crackdown on quantitative investment funds in China, with regulators scrutinising algorithm-driven trading strategies over concerns that they had exacerbated a stock market selloff, Reuters reported.Lingjun had managed around 100 billion yuan ($14.98 billion) at its peak, making it one of China's four largest quantitative investment funds before the regulatory action.Cai told Reuters that Lingjun had suspended fundraising activities for two years while reviewing its operations and strengthening internal controls.
The firm restarted domestic fundraising in March and has recently resumed seeking capital from overseas investors.Read more: Global Market Today: Asian stocks mixed as oil rally, AI concerns weigh on sentimentThe company's reforms include doubling the size of its risk-management team, integrating risk checks into trading systems and establishing a five-member investment committee to standardise investment decisions.
Cai acknowledged to Reuters that the firm's governance framework had been inadequate before the regulatory action.AI Boosts Interest in Chinese Quant FundsRenewed interest in China's quantitative investment industry has been supported by advances in artificial intelligence and improved prospects for investment returns, helping firms such as Lingjun regain access to international capital, Reuters reported.Cai told Reuters that the success of Chinese AI startup DeepSeek, which was incubated by quantitative investment firm High-Flyer, had contributed to a reassessment of Chinese assets and improved perceptions of the country's quant funds.The development has shifted investor attention towards the application of AI in investment management, rather than viewing quantitative funds solely as strategies that exploit algorithmic advantages, Cai told Reuters.Quantitative trading, which relies on statistical models, data analysis and automated algorithms to make investment decisions, has expanded rapidly in China's capital markets.
However, its growing influence has also attracted greater regulatory scrutiny as authorities seek to protect retail investors and maintain market stability.Strong Fund Returns Support FundraisingLingjun's recent investment performance has helped support its efforts to attract fresh capital. Its flagship equity fund delivered a return of more than 70% in 2025, ranking among China's top-performing hedge funds, according to data from fund distributor Simuwang.com cited in the Reuters report.The fund gained more than 10% in the first nine months of 2026, the data showed.By comparison, China's benchmark CSI 300 index rose 18% in 2025 but declined 6% through September 2026.Lingjun's renewed fundraising drive highlights the opportunities for Chinese quantitative investment firms to attract international capital as AI-driven innovation reshapes the industry.
However, the sector's continued expansion will depend partly on firms' ability to maintain robust risk controls and meet regulators' expectations following the crackdown, according to developments reported by Reuters.(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
