In 2016, the China Securities Regulatory Commission launched the wholly foreign-owned enterprise private fund manager (WFOE PFM) program to encourage foreign fund managers to make investments in China with money raised in China. With the launching of the first Qualified Domestic Limited Partner (QDLP) fund managed by a WFOE PFM in March 2023, foreign fund managers now have the choice to decide where to invest globally with the funds raised in China.

QDLP is a program developed by local Chinese governments that allows fund managers to invest overseas with money raised in China. It is a quota-based program, under which the amount each QDLP is allowed to make in outbound investments is capped by a quota approved by the State Administration for Foreign Exchange. QDLP was initially introduced in Shanghai in 2012 and subsequently expanded to other localities such as Beijing, Shenzhen, and Hainan.

WFOE PFM is a separate program launched in 2016. Initially it was designed to allow foreign fund managers to raise funds and invest domestically in China.

In 2021, the local government in Shanghai allowed WFOE PFM to apply for the QDLP quota, trying to merge these two schemes. It is believed that such a merger will enable foreign fund managers to optimize the capital structure, as well as human, market, and other resources for their business in China and across the globe. As of 14 March 2023, the first QDLP managed by WFOE PFM was launched in Shanghai. It is a closed-ended bonds investment fund managed by Azimut’s WFOE PFM.