For decades foreign investors have poured into China, but today it is the flow of funds in the other direction – Chinese money going overseas – that is luring bankers.

Lord Rothschild, chairman of London-listed RIT Capital Partners, is one such newcomer, having travelled to Beijing this week to work on a new private equity fund that will raise renminbi in China and invest it overseas. The fund, J. Rothschild Creat Partners, aims to raise $750m by the end of the year from Chinese companies, and is one of the first such funds to gain regulatory approval.

China’s capital controls and non-convertible currency make it difficult for Chinese individuals and companies to invest overseas. This dearth of investment opportunities, combined with negative real interest rates, has pushed investors into sectors such as real estate or physical commodities such as gold. The capital markets have been opening up gradually to allow outbound investment but the process has been slow, starting with equities through a tightly regulated scheme and moving on to outbound private equity funds only this year.