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Foreign private funds in China total 17

Italy’s Azimut has registered its first private securities fund with the Asset Management Association of China (Amac) after obtaining approval in February.

AZ Investment Management, a wholly-owned subsidiary of Azimut, completed registration for a private fund on 14 August, the database of Amac revealed.

The fund, incepted on 8 August, was named AZ Mixed No.1 Private Fund (Chinese name only). FSA contacted the firm to seek further details but they did not respond in time for publication.

Currently, the Shanghai entity AZ IM has seven licensed staff, including the firm’s general manager Stefano Chao.

Chao told FSA previously that the firm found domestic investors to be generally more interested in fixed income products.

Its parent, Milan-listed Azimut, has a presence in China and Singapore under the name of AZ Investment Management and in Taiwan under AZ Sinopro, according to the firm’s website.

The firm manages 14 hedge funds and 97 mutual funds mainly sold in Italy, Switzerland, and Luxembourg, data from FE shows. Its aggregate AUM was €40.8bn ($47bn) at the end of June 2018.

Foreign funds still small

To date, a total of 14 foreign firms have received permission to launch products investing onshore to domestic professional investors.

In addition, Barings, Income Partners and Van Eck Associates have recently set up in China, making them eligible to apply for the private fund management license.

But in China’s large fund industry, the foreign presence is still tiny. Fourteen foreign managers out of 9000 are PFM licence holders, according to the latest Amac statistics. The foreign managers have launched 16 funds aimed at domestic professional investors out of 36,000 total products available.

While an increasing number of global asset managers are setting up in China, the distribution of onshore products remains challenging. The major hurdles include lack of an onshore track record and brand recognition.

“Despite the fact that we have managed assets globally for years, our onshore track record only starts this year with the launch of the first WFOE fund,” said Amy Wang, head of China business at Aberdeen Standard Investments.

“No matter how long the track record you have offshore, [to investors] it is not 100% equivalent to domestic investment capabilities,” she added.



Source: Amac

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