Foreign funds “smell money” in China’s NPL market

International interest grows even though the industry cannot match the outsized returns of its early days.

China’s debt mountain may be growing, but one sub set of foreign investors view it as an opportunity to make money.

At an industry conference in Shenzhen on Thursday, distressed debt investors said they are looking to put more capital into China even though increased competition means the average acquisition price is now 60 cents on the dollar compared to 10 to 20 cents back in 2000 when the industry first got going.

“We raised $500 million in new capital last year to invest in China’s NPL market over a five-year period,” said Gregory Ritchie, founder of Orient LongXin, a Shanghai-based special situations fund.

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