An opportunity sometimes arrives unexpectedly for Shi Qiang. As the overseas fundraising director for a domestic quantitative private fund managing over ten billion yuan, he has been based in Singapore since last year, responsible for raising capital from wealthy family offices and asset management institutions across the Asia-Pacific and Middle East regions. Despite his efforts, he had been unable to break into the investment circles of Middle Eastern affluent families.
Over the past three weeks, however, he suddenly received proactive investment interest from three Middle Eastern family offices. Each family office expressed initial investment commitments of around $200 million to subscribe to two overseas-listed Chinese equity quantitative strategy products managed by his firm. Shi Qiang estimates that if these investments materialize, the overseas assets under management of his quantitative fund would surge by approximately 40%.
Shi Qiang recognizes that since the outbreak of conflict in the Middle East, wealthy capital and local asset managers from the region have accelerated their asset diversification strategies. Chinese equities, known for their resilient economic fundamentals, have emerged as attractive investment opportunities in their view.
Cai Haoming, a fundraising partner at a domestic private equity fund, has also observed this shift. On March 23, he held an online meeting with an investment head from a large Middle Eastern asset management firm, who indicated plans to increase their commitment in a new private equity fund.
Following the Middle East conflict, market rumors suggested that HKD 300 billion in Middle Eastern capital flowed into Hong Kong during the first week of March, drawing financial market attention. Cao Zhijie, a Hong Kong-based business head at a major Chinese securities firm who monitors capital flows in the Hong Kong market, notes that while there is no data to confirm these rumors, inquiries about establishing family offices in Hong Kong have increased noticeably since March compared to February, including interest from Middle Eastern high-net-worth individuals seeking to enhance their global asset allocation.
The trend is indeed shifting.
For Shi Qiang, the unsolicited investment interest from Middle Eastern capital came as a surprise—these three family offices had never previously invested in China’s secondary market. Why the sudden interest in Chinese stocks? He soon found answers.
One family office’s investment director explained that the funds were originally earmarked for high-end real estate projects in the Middle East. However, as the ongoing conflict significantly impacted local property markets, they quickly adjusted their strategy to redirect capital toward equities with strong economic fundamentals and resilience against high oil prices. After market research, they concluded that China’s ample crude oil reserves, robust economic growth, and relatively low price-to-earnings ratios made Chinese stocks an attractive investment. They proactively reached out to two Chinese quantitative funds through referrals.
Another family office’s Asia-Pacific investment head offered a more direct reason: the escalating Middle East conflict has driven oil prices higher, prompting central banks in several countries to consider renewed interest rate hikes to counter inflation and currency depreciation, thereby pressuring local stock indices. Consequently, they decided to focus on equity markets with accommodative monetary policies. Given China’s ongoing moderately loose monetary stance and the significantly lower P/E ratios of A-shares and Hong Kong stocks compared to other Asia-Pacific markets, they allocated 10% of their Asia-Pacific portfolio to Chinese equities for the first time.
Wind data shows that as of March 24, 2026, the Hang Seng Tech Index had a P/E ratio of about 21.2x, notably lower than South Korea’s KOSDAQ index (around 110x) and the Nasdaq index (approximately 38.6x).
Wen Tianna, CEO of Broad Capital International, points out that the Hang Seng Tech Index’s current P/E ratio is at a historical low (13%–15%). Considering the ongoing earnings growth of major tech constituents, there is a clear mismatch between valuation and corporate performance fundamentals. Moreover, the index includes both high-dividend blue-chip stocks and high-growth Chinese tech leaders, aligning well with Middle Eastern capital’s preference for both safety and growth.
Wen reveals that since March, inquiries from Middle Eastern clients about Hong Kong stock investments and setting up family offices in Hong Kong have increased by over 50% month-on-month. Many high-net-worth individuals who previously established family offices in Dubai are now considering relocating their wealth to Hong Kong.
The primary market is also seeing additional Middle Eastern capital commitments. Earlier this year, Cai Haoming’s private equity fund planned to launch a high-tech industry investment fund. A major Middle Eastern asset manager, a key investor in the fund, had been hesitant to increase its commitment due to three portfolio companies from a previous fund failing to achieve planned IPOs, dragging down returns.
Now, the asset manager has decided to raise its commitment by about 10%. Despite Cai’s earlier efforts to persuade them, it was the conflict that ultimately changed their stance. The firm believes the prolonged conflict will impact global economic cycles, necessitating greater private equity investments as a cross-cycle hedge. Given China’s thriving tech sector, rising international competitiveness, and smoother IPO processes for high-tech firms, they opted to increase exposure to Chinese market investments.
Cai further analyzes that disruptions in Hormuz Strait shipping have heightened global energy supply risks, accelerating many countries’ transition to alternative energy. China’s advanced clean energy, AI applications, and advanced manufacturing sectors, known for their technological competitiveness, are poised to benefit from this global shift—a key factor in the Middle Eastern firm’s decision to upsize its China investment.
Shi Qiang notes that all three family offices aim to complete due diligence and investment discussions within two to three months to finalize terms quickly. Faced with this sudden opportunity, he promptly provided requested materials on historical performance, investment team expertise, and internal operations.
Typically, Middle Eastern capital sets aside at least six months for observation, probing investment strategies and compliance to assess alignment with their philosophy. Compressing this process into two to three months poses a challenge. To streamline due diligence, Shi Qiang directed his team to compile data from early pandemic periods, the initial phase of the 2022 Russia-Ukraine conflict, and the recent Middle East outbreak, showcasing their robust strategies and experience during black-swan events.
Unexpectedly, after sending the materials, responses were delayed—staff often replied after two to three days with additional requests. Shi Qiang soon realized that the conflict was hindering operational efficiency, as family office staff were unable to work on-site.
On March 20, he contacted one family office’s investment director to schedule an online meeting for detailed discussions. After a three-day wait, he received an email stating that due to the conflict, key personnel from investment, risk, compliance, and legal departments were working from home, forcing a postponement.
On March 24, another family office’s Asia-Pacific investment head called to explain that the conflict had led the principal family members to relocate abroad, delaying investment approval processes and temporarily halting due diligence. However, they affirmed that increasing Chinese equity exposure remained a strategic priority.
Unwilling to wait passively, Shi Qiang recently emailed all three family offices’ investment directors, expressing concern for their safety and inquiring about additional due diligence needs.
Cai Haoming also faces delays. Although the Middle Eastern asset manager committed to additional funding, term negotiations have stalled because their primary market investment head is working remotely. Cai plans to travel to the region once tensions ease to finalize terms in person. “For Chinese investment firms, this is an unmissable opportunity to secure more Middle Eastern capital,” he says.
Rumors about HKD 300 billion in Middle Eastern capital entering Hong Kong in early March have circulated widely. Zhu Zhaoyi, executive director of the Middle East Institute at Peking University’s HSBC Business School, considers the claim “unrealistic,” noting that mature Middle Eastern institutions are unlikely to make large-scale portfolio adjustments so quickly.
Cao Zhijie agrees that significant Middle Eastern allocations to A-shares and Hong Kong stocks will take time. Over the past two weeks, he received inquiries from two Middle Eastern investment firms seeking insights into Hong Kong and A-share market conditions, investment themes, capital flow regulations, and policy trends. Neither firm has previously invested in Chinese equities and is unlikely to make large allocations immediately.
It is understood that several Middle Eastern institutions currently allocate less than 5% of their portfolios to emerging market equities like A-shares. Raising this allocation requires investment committee approval, involving multiple meetings to discuss the rationale and feasibility—including the availability of mature hedging tools and ease of cross-border capital movements.
Cao is currently encouraging these firms to start with a 3% trial allocation to Chinese equities, gradually increasing based on performance. To facilitate this, he has briefed them on global capital attitudes toward Chinese stocks and recent fund flow trends in A-shares and Hong Kong markets.
Shi Qiang has a bold idea: once investment agreements are finalized and trust established, he will suggest that the three family offices consider setting up single-family offices in Hong Kong, channeling more wealth into the city for direct investments in China’s primary and secondary markets.
He has already discussed this concept with one family office’s investment head, who showed considerable interest. Many Middle Eastern wealthy families, seeking wealth diversification, are evaluating global financial hubs like New York, London, Hong Kong, and Singapore, focusing on regulatory frameworks, capital mobility, and tax incentives for family offices.
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