China’s qualified foreign institutional investor scheme (QFII) and its renminbi equivalent (RQFII) allow foreign institutional investors to invest in onshore Chinese assets, within allocated quotas. By comparison, the qualified domestic institutional investor (QDII) scheme is a channel for onshore investors to invest offshore.
Foresee Global AM, the Hong Kong-based Chinese subsidiary of Shanghai-based Foresee Investment, received a renminbi qualified foreign institutional investor (RQFII) last month. The firm has not received a quota yet, according to records from China’s State Administration of Foreign Exchange (SAFE).
In Shanghai, Foresee Investment is a quantitative specialist fund manager that only caters to domestic qualified investors in China, which include institutional and high net worth individuals, according to the firm’s website.
The firm received an asset management licence (Type 9) in Hong Kong, in 2016, according to records from the Securities and Exchange Commission.
At the time, the firm said in a statement that obtaining the licence was the first step to internationalise, with the aim of servicing offshore high net worth and institutional investors.
Industry players have observed the influx of Chinese subsidiaries in Hong Kong with the goal of expanding overseas. For example, there has been an increasing trend of Chinese asset managers launching Ucits or alternative investment funds in Europe and they typically do it through their Hong Kong office, Alessandro Silvestro, Hong Kong-based managing director for Asia-Pacific at Lemanik Asset Management, said previously.
Slowdown in licences?
No QFII licences were issued last month. the last one issued was in November 2017 to APG Asset Management.
On the RQFII front, only eight firms received licences this year, with four of them being different State Street Global Advisor entities.
In total, there are 226 RQFII licence holders and 307 QFII licence holders, according to CSRC data.
However, foreign managers, such as JP Morgan Asset Management, Blackrock and UBS Asset Management, continue to top-up their RQFII and QFII quotas in response to client demand for onshore investments.
In total, SAFE awarded a total of RMB 622.07bn ($91.21bn) in RQFII quotas to 197 licence holders and $100.46bn of QFII quotas to 287 holders.
