London-based Baring Asset Management has launched its China A-share Fund with over $200 million from institutional investors, after media reports said Fidelity missed the fundraising target for its China Special Situations Fund.

Baring's fund will invest in companies established or operating in China, with at least 70 per cent of its assets invested in A shares of Chinese companies. It is run by Agnes Deng, the firm’s head of China equities, supported by an investment team.

The amount of institutional money raised by the fund meets its full Qualified Foreign Institutional Investor (QFII) quota, set by the Chinese authorities to help open up the equity market.

Baring’s success is despite doubts which have emerged recently about valuations in China. Institutional interest in Fidelity’s fund, run by high-profile fund manager Anthony Bolton, fell short of expectations (although it had a more ambitious overall target of £630 million), Reuters reported, citing a source close to the firm. However, it was reported that while some investment managers stayed out due to fears about over-valuation, retail demand for the fund remained strong.