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China debt fund at risk amid strategy row 

June 13, 2016

Henny Sender, Financial Times

Shoreline Capital, a Chinese distressed debt investor with more than $1.5bn in assets under management, is in turmoil and losing staff at a time when it should be benefiting from mainland banks’ efforts to deal with problem loans.

Disputes between the two principal founders about the fundamental direction of the Guangzhou-based investment firm and a series of defections could now jeopardise its survival, according to five people involved with the business as investors and employees.

At least 14 investment professionals have left a firm that described itself has having “more than 20” — and investors will soon be asked to decide whether they want to leave their money with the firm or want its funds wound up.

“The timing is very ironic … If we were all on the same page, we could even be raising a new fund,” said one key principal at Shoreline.

Ben Fanger and Xiaolin Zhang, who met at the University of Chicago, established the firm in 2004, and it has successfully raised three funds, all in US dollars, from a group of blue-chip investors including the Duke University endowment. Read more

 
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