Morgan Stanley has teamed up with the eastern city of Hangzhou to launch yuan-denominated funds, Reuters reports. The U.S. bank has entered into an agreement with the local government and decided to set up its China headquarters for private equity investment in the city. The partnership will seek to raise $225 million in the initial phase. The funds will invest in non-public companies. In 2008, Morgan Stanley acquired a 20% stake in the government-backed Hangzhou Industrial & Commercial Trust. Click here for the story from target="_blank" href="http://www.reuters.com/article/idUSTST00067620101203" style="color: rgb(0, 34, 252);">Reuters .