The former Jewish ghetto district in Shanghai has transformed itself into China’s hedge fund hub.
Forbes reported that the city’s Hongkou district, which was home to thousands of immigrants who fled Hitler’s regime, is offering tax incentives and lower rent prices--in comparison to Shanghai’s financial district-- in an attempt to lure hedge fund firms to the area.
The article added that Hongkou’s ongoing transition to a hedge fund center follows Shanghai’s existing appeal to foreign financial service companies through a new program that offers tax and other benefits to hedge fund firms that wish to do business in the country.
The Chinese government reportedly approved six hedge funds last month to raise a total quota of $300 million that will be equally divided between Canyon Partners, Citadel, Man Group, Oaktree, Och-Ziff and Winton Capital.
About 38 firms are expected to be operating in the Hongkou Fund Hedge Fund Zone by the end of 2014.