What’s new: Five Chinese mutual funds previously aimed at investing in the Shanghai portion of Ant Group Co. Ltd.’s dual IPO have seen large numbers of investors pull their money out, following the abrupt suspension of the fintech giant’s potentially record-breaking IPO in early November.
As of Thursday, nearly 2.6 million fund accounts have redeemed their investments, which totaled about 20 billion yuan ($3.1 billion), from the five funds, according to statements released by the fund managers.
The background: The five fund managers — E Fund Management Co. Ltd., Penghua Fund Management Co. Ltd., China Asset Management Co. Ltd., China Universal Asset Management Co. Ltd., and Zhong Ou Asset Management Co. Ltd. — had promised to invest up to 10% of the 60 billion yuan they raised from the funds in Ant Group’s IPO. The funds sold out within days after they launched on Sept. 25.
The high number of redemptions shows that the IPO suspension has severely dented investors’ confidence toward the highflying fintech giant. Chinese regulators have stepped up oversight of the company amid concerns of potential systematic financial risks. They have ordered Ant Group to return to its origins as a payment service provider and overhaul its lending, insurance, and wealth management services, which would likely hamper its profitability and valuation.
Related: What You Need to Know About Ant Group’s Suspended IPO and the Future of Chinese Fintech
Cover Story: Why Ant Group’s IPO May Stay on Ice for a While
Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)
