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"Now, many entrepreneurs are starting to turn away foreign currency funds," Mr. Wang at China Equity said.
If TPG raises $1.5 billion in local currency funds, it will become the biggest global private equity firm in China's local currency market.
"This is the new model," said Lawrence Sussman, a Beijing-based lawyer who specializes in local currency funds for O'Melveny & Myers.
So far this year, investors have poured $22.6 billion into local currency funds, more than four times the amount in 2007, the last boom year, according to the fund tracker EPFR.
Holiday travel to the continent should be more pleasurable than for many a year and currency funds run offshore by leading banks and fund managers may be back in vogue.
REUTERS On Reading the Fed, Humans Triumph Over Machines | Bloomberg News reports: "Currency funds that use computer models for trading decisions made 0.9 percent this year through May, compared with 2.5 percent for those that don't, the biggest margin since 2008, according to the latest data from Parker Global Strategies L.L.C".
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He co-founded and managed GaiaCorp, a top performing currency fund whose profits funded investments in environmental projects.
Many of the big global firms have opened a local currency fund.
The Blackstone Group signed a joint venture in November with the Shanghai government to create a $732 million local currency fund.
"But there will not be a fundamental solution until we can find new sources of foreign currency funding".
The Merk Hard Currency Fund (MERKX) manages a basket of currencies that may do well when the dollar is down, and offers a small allocation to gold.
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