By signing the memorandum of understanding with the free trade zone administrator, Aegon has signalled its intention to establish a WFOE in Shanghai, which will allow it to sell offshore investment products and services to domestic institutions and high net worth investors in China.
This first step towards setting up a WFOE will allow Aegon to “strengthen and deepen its strategic relationships in the region specifically with its Chinese joint venture Aegon Industrial Fund Management Company (AIFMC)”, according to a company statement.
The firm is headquartered in the Netherlands and manages approximately €315bn ($354bn) of assets worldwide, according to the company’s website.
It has a 49% stake in AIFMC, which it formed with majority owner Industrial Securities in 2008 to provide CSRC-approved fund products and asset management services to the onshore market.
The new WFOE aims to complement AIFMC’s distribution strategy and investment capabilities, and “as signatories we will be one of an early group of global asset managers able to bring world class investment strategies to the domestic Chinese high net worth and institutional market,” said Martin Davis, head of Aegon in Europe, in the statement.
FSA contacted Kames Capital, part of Aegon AM, for further details, but a spokesman declined to provide more information.
Currently, there are around 18 foreign firms with private fund management (PFM) licences, which enables them to launch onshore products to qualified institutional and high net worth. Fourteen of those firms, which include Schroders, Fidelity and Value Partners, have launched at least 30 onshore funds for qualified investors.
Other firms, such as Blackrock, Neuberger Berman and UBS Asset Management have also obtained qualified domestic limited partnership (QDLP) licences, which allow them to raise money domestically to invest in offshore investments, with assigned quotas.
