Trillion-dollar "windfall" in the private equity circle, a low-key "wealth migration tide"

In the Chinese private equity securities industry, a set of suddenly "jumping" data has emerged.

It is not that a particular institution has suddenly experienced rapid growth, nor is it a complete reversal of market sentiment, but rather the entire industry's scale has been rapidly "raised" to a new level within a month.

What is even more intriguing is that this leap cannot be fully explained by the number of new products, market hotspots, or a significant strengthening of a certain style.

From public data to institutional feedback, all point to a deeper change:

The flow of funds has changed, and the rhythm has changed.

Why October in particular? Where does the growth come from? And who is catching these suddenly heavier funds?

All of this points to a Chinese private equity industry that deserves to be re-understood.

Monthly Increment of One Trillion

According to the information disclosed by the Asset Management Association of China, when the private equity securities industry data for October was released, the most striking figure was not the total scale exceeding 7 trillion yuan, but rather:

The stock scale "suddenly" increased by more than one trillion yuan in a single month.

Comparing two indicators reveals the uniqueness of this change: the scale of newly registered products in October was only over 40 billion yuan, which is considered normal; but the stock scale expanded by 1.14 trillion yuan during the same period, with an increase of over 17 percentage points.

This contrast is rarely seen in the private equity industry, as it indicates that the growth did not come from "new products," but rather that the funds and net values of "old products" were unusually raised simultaneously in the same month.

It resembles a sudden jump in an internal curve: it is not funds from outside the industry rushing in, but rather the funds that were already in the pool collectively became "heavier" at this October juncture.

Most critically, and intriguingly:

This single-month increase is the first of its kind for the Chinese securities private equity group.

New Products Not Released Much, Yet Scale Increased

At this point, investors may feel a bit of "super experience": the record single-month increase in private equity scale feels like a bull market, right?

Moreover, the increment of over one trillion yuan precisely comes from the contribution of securities private equity (private equity directed at stocks, bonds, and commodities, not involving equity venture capital in the primary market).

Some investors may naturally wonder, "Did many new products get launched?" After all, high-net-worth clients "have money" and are looking for high-end customized investment products.

However, if we break down the October data, we will find that the focus of this rapid industry growth does not lie in new registrations.

More accurately, new registration scale ≠ single-month stock scale growth.

The new registration scale was only over 40 billion yuan, which means that the pace of new products in October did not differ significantly from previous months.

In other words, there was no phenomenon of clustered registrations or concentrated fundraising in October; the pace of new products remained within the normal range.

What was truly pushed up was the stock scale itself.

This includes the following two parts:

First, the net value of old products increased, meaning that the money originally in the pool "gained weight" due to the market rise.

Second, net subscription inflow, which means investors continued to add money to these old products, making the pool's size larger than before

The uniqueness of October lies in the rare simultaneous overlap of two forces, rapidly amplifying the scale of existing products.

This is completely different from the past reliance on new products to raise funds for "scaling up"; it points to a deeper, more elusive industry phenomenon:

Funds are not pouring into a new container from the outside, but are continuously added within an existing container, causing a sudden change in scale within a month.

Concentrated and Rapid Growth of Leading Institutions

If we zoom in on the scale leap, a clearer signal emerges:

The incremental growth in October was mainly concentrated in leading private equity firms, especially top quantitative private equity institutions.

According to statistics from Private Equity Ranking, the number of private equity firms with over 10 billion yuan in scale has risen to 113, an increase of 18 from September. Among the newly added 10 billion private equity firms, quantitative strategies dominate, with about 10 belonging to the quantitative system, accounting for more than half.

This means that the "expansion of the 10 billion tier" in October is not a widespread phenomenon across the industry, but rather a concentrated crossing of the 10 billion threshold by quantitative strategies. There are also new additions in subjective long positions, but the increase is significantly smaller.

At this point, a clearer "image" emerges:

The systematic expansion of leading quantitative institutions drives the overall scale curve of the industry to jump.

A person from a 10 billion private equity firm told Zhitong Finance that the more it is a turning point in the market and a window for changes in fund direction, the easier it is for quantitative institutions to capture the first wave of incremental funds at critical moments, thanks to standardized strategies, transparent risk control models, and strong capital absorption capabilities.

The Market "Supported" Them

From the performance perspective, October itself provided a "favorable situation" for quantitative private equity.

According to statistics from Private Equity Ranking, among the quantitative long products with performance displays, the average return this year has exceeded 40%, with the average return in October being the highest among all stock strategies, approximately 0.93%, and the average excess return reaching 1.5%.

It seems that this is not a one-sided market with a significant rise in the index. However, after experiencing previous phase-specific market conditions, the adjustment period of A-shares in October represents a state of "high turnover, extreme style differentiation, and active individual stocks."

It can be understood that the more this state exists, the more it is the most "comfortable" stage for quantitative strategies.

For leading quantitative institutions, such a market structure is very direct: the net value of old products is generally elevated, and their positions on the product performance list rise accordingly. High-net-worth clients and institutions are more willing to "add to their positions" with existing managers when making subscription and redemption decisions.

Thus, the rapid growth in scale in October has a clear underlying support: it is not that fund sentiment suddenly became aggressive, but that quantitative products were in a month that was extremely friendly to them:

The latter first elevated net values through performance and attracted new funds to old products with sustained performance throughout the year.

Who "Divided" This Trillion Scale

Behind the trillion-scale incremental funds, who are the financial backers?

It cannot simply be explained by a few words about high-net-worth clients; it is related to the diverse sources continuously buying "old products."

After communicating with industry insiders, Zhitong Finance found the following characteristics: The first is the high-net-worth individual group. The redemption pressure of some traditional public fund products continues to exist, and when high-net-worth clients reallocate this portion of funds, they are more inclined to flow towards top-performing private equity funds.

The second is the continuous "increased investment" from the institutional side. Proprietary FOFs from brokerages, separate accounts from small and medium-sized insurance companies, and some bank wealth management funds are all using private equity as a platform, gradually increasing the proportion of equity allocation and entrusting equity investments to more market-oriented teams.

Therefore, the "trillion-dollar windfall" is not a sudden emotional surge, but a joint choice from both the retail and institutional sides during the same period, which constitutes the market's latest answer to private equity and equity assets.

This trend is likely to continue evolving in the future