The entity, named BEA Union Investment Management (Shenzhen), received approval from the Shenzhen Qianhai Management Authority, according to a statement from the firm.
An investment management WFOE allows the firm to launch domestic “private securities investment products”, or non-retail focused funds (with domestic investments) and sell them to onshore institutional or high net worth investors. However, the firm has yet to sketch an operational plan and product strategy for the entity.
The manager is arranging a meeting with the Asset Management Association of China (AMAC) for registering as a private securities fund manager, said Eleanor Wan, CEO at BEA Union Investment. The registration is a required step before a firm can launch onshore equity or fixed income-products to investors.
However, among at least a dozen other foreign firms holding IM WFOE licences, only four asset managers have obtained a private fund management licence from the AMAC: Singapore’s Fullerton Fund Management, Man Investments, Fidelity International and UBS Asset Management. Fidelity is the first to launch a product in China and plans to launch another product later this year.
Many of the large fund management firms have established WFOEs in Shanghai. Wan said the firm set up in Qianhai, near Shenzhen in order to be close to the firm’s Hong Kong headquarters.
This year, BEA Union began distribution of funds in offshore markets. In July, it began selling two Asia-focused funds to Swiss investors through the Mutual Recognition of Funds (MRF) scheme. The firm is also considering launching funds in France, which is expected to link with Hong Kong as another MRF destination. It was only in July this year that Hong Kong and France signed a memorandum of understanding linking their mutual fund markets.
