China's shadow banking sector drawing foreign capital

China’s non-bank private lending sector has been drawing foreign interest in recent years as sovereign wealth funds and the offshore wealthy have entered the fray via mezzanine financing. Traditionally the sector has been served by Chinese trust companies and pawn shops. But Barry Lau, co-founder of fund-of-funds investment manager Gen2 Partners based in Hong Kong, notes its $100 million-plus China-focused mezzanine fund has pulled in 20 investors. These include a Middle East s…