The first foreign hedge fund managers that will receive quotas to raise money from Chinese investors are likely to start doing so by the end of January and possibly as early as this year, say sources.

The six firms in question are Canyon Partners, Citadel Group, Man Group, Oaktree Capital, Och-Ziff and Winton Capital, each of which will be able to raise up to $50 million under Shanghai’s qualified domestic limited partner (QDLP) scheme, according to media reports.

Sources familiar with the scheme say the names and quota figures are accurate. The fund managers either declined to comment or did not respond to requests for comment by press time.

While the managers can’t officially raise funds yet, they have all been talking to potential investors, sources say. A lot of the preparatory work has been done, although issues remain that need to be ironed out. For example, there is still a lack of clarity over the process of working with international fund administrators that have obtained a licence to operate in China, says a source.

The firms are not setting up new funds, but rather feeder vehicles for their existing strategies in the form of onshore limited partnerships.

Reports late last year had said the scheme could launch with a quota of as much as $5 billion. That said, the Shanghai Financial Services Office (SFO) can raise the threshold from the current $300 million total, says a source. “It comes down to how confident the SFO in the hedge fund’s track record and so on.”

The applicant managers attended a selection hearing a few months ago, and the successful six were notified in July that they would receive a quota, says one source closely involved with QDLP.

The expectation is that the number of managers will expand once the regulators are happy the initial phase has been a success. Sources suggest the firms that have been involved as applicants from the start are the most likely candidates to be approved for the next round of quota.

Initial news of the scheme emerged in March last year, but sources say it was put on hold in light of the imminent change of government in China.

The Shanghai authorities “wanted to go with big, reliable names; tried-and-trusted firms with long track records", says a source, and each of the six chosen have at least $14 billion in assets under management.

Canyon Partners is a $20 billion multi-strategy manager founded in 1990 and based in Los Angeles.

Citadel Group, the New York firm founded in 1990 by Ken Griffin, is a multi-strategy player with around $14 billion in AUM as of the end of 2012.

UK-based Man Group had $52 billion in AUM as of June 30.

Oaktree Capital, also in Los Angeles, was founded in 1995 and has some $80 billion in AUM across hedge fund and private equity strategies.

New York-based multi-strategy shop Och-Ziff Capital Management was set up in 1997 and runs $37 billion in assets.

Winton Capital is a London-based quantitative specialist founded in 1997, with around $25 billion in AUM.