Broker-Backed Private Fund-of-Funds Scale Surges, New Issuances Up 60% in First Two Months! Top Players' Year-to-Date Incremental Growth Exceeds 1 Billion Yuan

Everyday Economic Reporter | Li Na Everyday Economic Editor | Peng Shuiping

The popularity of new public offering FOF launches continues to surge, constantly dominating industry headlines. As of March 16, since 2026, 10 public FOFs have sold out in a single day, and the total market size of FOFs has surpassed 300 billion yuan.

Private equity FOFs are also experiencing underlying momentum. A securities firm asset management professional told the “Daily Economic News” reporter that, according to incomplete statistics, in the first two months of 2026, the number of newly issued private private FOFs increased by over 60% year-on-year. Meanwhile, leading institutions’ private FOFs grew by over 10 billion yuan during the same period. Capital inflows are coming from multiple channels, including bank wealth management transfers, non-standard maturity conversions, and dispersed allocations from existing clients.

With the influx of funds, the industry ecosystem is undergoing a qualitative change. Leading institutions are moving from distribution to deep research and investment collaboration with private funds, evolving product designs toward more refined liquidity management and diversified strategy layouts.

Private FOFs are booming: new issuance growth exceeds 60%

“From our experience in securities firm private FOF fundraising, subscription enthusiasm has also increased,” a senior executive from China International Capital Corporation (CICC) Asset Management revealed. Although the company prefers steady, ongoing marketing rather than deliberately creating “blockbusters,” several collective products have recently achieved their target fundraising goals in a short period. Since launch, these products have been highly recognized by clients, with steady growth in scale.

A research professional from a securities firm asset management told the “Daily Economic News” that “2025 is actually the breakout year for private FOFs. According to incomplete statistics, in 2025, securities firm asset management launched 773 new collective FOFs, compared to 347 in 2024. In the first two months of 2026, 125 new collective FOFs were issued, up from 76 in the same period last year, an increase of over 60%.”

A senior figure from a leading institution said, “Our company’s private FOF scale increased by over 10 billion yuan in the first two months of 2026.”

Huaxia Asset Management provided more concrete evidence: since 2026, four new private FOF products have been added, with a scale of 2.8 billion yuan in hybrid and equity FOFs, an increase of 300 million yuan from the end of last year.

Guojin Asset Management observed a shift in investor sentiment: from summer 2025 to the first quarter of this year, demand for low-volatility income and multi-strategy allocation products has significantly increased. Although fundraising is still within expectations, there is a clear recognition of these products among investors.

Regarding the popular private FOF types, a Guojin Asset Management professional told reporters, “From a strategy perspective, both strategy combination FOFs and asset allocation FOFs are gaining market acceptance.”

Huaxia Asset Management added that, in terms of capital flow, high-volatility equity-biased FOFs are growing faster.

“Private FOF strategies are flourishing across the board. Low-risk strategies are mainly fixed income+ or arbitrage, aiming for low volatility and competitive returns,” said a securities asset management professional in Shanghai. “High-risk demands are also strong; quantitative long strategies have been in high demand, and subjective stock strategies are clearly recovering. I think this year may not be a big year for quantitative strategies, but it could be a big year for stock long strategies.”

It is understood that at the end of last year, a securities firm asset management launched a small oil and gas-themed collection product with only 200 accounts, which was snapped up on the same afternoon.

Capital Decoding: Not Just Moving Deposits

Wind data shows that in February this year, the number of private securities fund filings reached 1,296 in a single month, nearly doubling month-on-month. Funds are flowing into the market through securities firm FOF and third-party FOF channels at an accelerating pace. Against the backdrop of declining interest rates and the transition to net value-based management, more and more funds prefer to enter via FOF structures, relying on professional institutions for secondary screening to smooth risk.

Where the capital comes from often reveals more about market logic than the scale itself.

“A diversified source of funds subscribing to private FOFs on our platform includes bank wealth management transfers, non-standard trust maturity conversions, and dispersed allocations from existing stock clients,” said the aforementioned senior from CICC Asset Management.

From industry perception and client inquiry trends, 2026 may be a significant “deposit transfer” window. As a large number of high-yield fixed-term deposit products mature, coupled with the continued decline of the interest rate center, the market may face a transformation in residents’ wealth reallocation needs. Currently, funds flowing out of deposits are low-risk, seeking principal safety—typical of conservative capital. In a declining interest rate environment, clients find that past high yields are no longer realistic and are dissatisfied with current deposit rates, creating a psychological gap.

This contradiction—“fear of loss, yet low returns”—is quietly driving changes in investment behavior. Many clients are no longer just investing in deposits but are actively seeking diversified, low-volatility, steady-yield alternatives. Investment behavior is shifting from “single savings” to “scientific allocation,” aiming to find a new balance between low risk and return flexibility.

Guojin Asset Management confirmed this trend from a channel perspective. It revealed that in recent years, bank channels, wealth management, and institutional outsourcing have all gained traction, with capital inflows coming from multiple sources.

“Not all bank deposit clients will directly invest in FOFs because the risk levels don’t match. Deposits are generally R1 level, while FOFs are mostly R3 or R4,” added the senior from the securities firm. “Therefore, the main FOF clients are those who are not satisfied with fixed income+ returns, willing to take on higher risks beyond fixed income, and pursue multi-strategy gains.”

Ecological Transformation: From Distribution to Deep Collaboration

Beyond capital inflows, the industry ecosystem of securities firm private FOFs is undergoing deeper transformation.

“The cooperation between leading private funds and securities firm FOFs has become more integrated. They are moving from traditional distribution relationships to deep research and investment collaboration, forming strategic partnerships,” the senior from CICC Asset Management told reporters.

In the past, cooperation between securities firm FOFs and private funds was mostly at the product distribution level. Now, the research teams of top securities firm FOFs are extending their involvement into strategy development and iteration with private funds. Both sides are no longer content with a “launch a product, cooperate once” model but are building two-way empowerment covering product design, strategy reserves, and data sharing, maintaining sharpness in strategy adaptation amid market volatility.

This shift essentially changes the cooperation logic. Previously, the core of distribution was selling; now, the core of research collaboration is holding steady and matching well. The CICC Asset Management professional cited that during increased market volatility, they maintain high-frequency communication with underlying managers to jointly assess strategy adaptability and determine if adjustments are needed. This ongoing process helps private funds better understand capital needs and reassures FOF investors with solid management support.

Meanwhile, the FOF product side is also quietly evolving. Guojin Asset Management observed that: first, liquidity management is becoming more refined, with more short-lockup FOF products emerging. They believe this aligns with the industry’s effort to attract funds with specific durations, actively adapting product design to liquidity demands. Second, multi-strategy FOFs are regaining attention from banks and other channels, possibly due to changing market expectations for fixed income assets.

From distribution to research collaboration, from single products to refined liquidity design, these seemingly subtle changes not only enhance the underlying quality of FOF products but also lay a more solid foundation for the industry’s long-term healthy development.

Private FOF Operations Face Triple Challenges

On the other side of capital inflows, securities firm private FOFs face deeper operational challenges.

“Real-time transparency of underlying assets remains the biggest challenge in private fund operations,” said a Huaxia Asset Management professional.

Guojin Asset Management pointed out that the current challenge may lie in balancing the limited capacity of high-quality strategies with the complexity of underlying transparency management.

As FOFs rapidly expand, a major test is how to allocate quality assets without diluting excess returns. Asset reserves involve complex work, and the involvement of portfolio managers may become increasingly prominent. From a long-term perspective, more assets are likely to be created rather than selected, meaning FOF managers cannot just passively screen but must actively refine strategies.

Another key issue is the continuous addition and subtraction in portfolio management. Addition involves evaluating the portfolio from multiple dimensions—whether asset allocation or strategy allocation—assessing how well fund assets meet objectives and whether they enhance risk premiums; subtraction requires accurately identifying core sources of returns and risk exposures.

Huaxin Securities summarizes three key aspects of the challenges: depth, breadth, and speed. For customized products, to meet client needs, more frequent adjustments to holdings are required—this demands high speed; all rebalancing must be based on broad asset coverage and deep understanding of private strategies. This places high requirements on risk control systems, authorization frameworks, and investment systems.

Multi-strategy Approaches to Meet Diverse Client Needs

In response to diverse capital demands, securities firm asset managers follow layered, precise strategy layouts in private FOFs, but each emphasizes different approaches.

“Regarding product design, we focus on stratified strategies to meet diverse needs,” the senior from CICC Asset Management explained. “Equity-enhanced strategies can be powerful for capturing beta and alpha; market-neutral strategies provide low correlation to market movements, suitable for conservative clients; CTA strategies, with low correlation to stocks and bonds, can serve as diversifiers and hedges.”

The core logic of this layout is to maintain multi-asset, multi-strategy approaches, ensuring that aggressive clients do not miss equity opportunities while meeting conservative clients’ low-volatility requirements.

Guotai Haitong Asset Management positions its products toward relatively stable, absolute-return strategies.

This judgment is based on two macro observations. In a low-interest-rate environment, the safety margin of pure bonds has thinned. Traditional fixed income+ strategies relying solely on bond coupons and flexible stock positions are experiencing changing risk-reward profiles. With narrower defensive space in bonds, tolerance for stock volatility decreases, requiring more diverse, less correlated strategies.

Another insight comes from macro volatility perceptions. Increasing macro fluctuations have generally lowered Sharpe ratios of single strategies, necessitating risk hedging through diversified, low-correlation strategies.

As a mid-sized securities firm, Huaxia Asset Management clearly categorizes its key products into two types. One is high-volatility equity-biased FOFs based on relative return targets; the other is multi-strategy medium-volatility FOFs based on absolute return goals, covering equity long positions, flexible hedging, market neutrality, CTA, and other strategies.

Guojin Asset Management also follows two main lines: one is asset allocation strategies based on long-term risk premiums to generate beta-like returns, with fund investments serving as an enhancement; the other focuses on selecting high-quality underlying assets and optimizing portfolio outcomes. In terms of strategy layout, they consider how to proactively align with different investment goals. For sub-funds, they believe low-volatility yield strategies, equity index enhancement, and commodity CTA strategies may attract market attention this year.