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Franklin Templeton receives QDLP license

The firm received its licence four years after it established a WFOE in China.

Franklin Templeton China has received a qualified domestic limited partnership (QDLP) licence from the Asset Management Association of China (Amac) on Monday, according to Amac’s records.

The license allows foreign managers to raise money in China, within assigned quotas, to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and property.

A Hong Kong-based spokeswoman said that China is a key market for the firm. However, she declined to comment on whether the firm has been granted a QDLP quota.

Launching QDLP products requires quota and China has been cautious about issuing the quota because the programme takes money offshore and capital outflows could impact the value of the RMB.

Separately, UBP received the QDLP qualification last month, while Oaktree CapitalEastspring Investments and Allianz Global Investors received approval from the Amac to launch their QDLP products this year.

Building its footprint

Franklin Templeton’s QDLP qualification comes four years after it established an advisory wholly-foreign owned enterprise (WFOE) in 2016, which was upgraded to an investment management (IM) WFOE in 2017. An IM WFOE is a prerequisite to launching an onshore private fund to domestic qualified (high-net-worth and institutional) investors.

It still does not have a private fund management (PFM) licence, which enables foreign entities to develop and sell funds investing in onshore assets to domestic qualified investors. The spokeswoman declined to comment whether the firm is planning to apply for the qualification.

The firm also has two joint ventures in China, including Shanghai-based Franklin Templeton Sealand Fund Management and Hong Kong-based China Life Franklin Asset Management, the spokeswoman added.

Established in 2004, Franklin Templeton Sealand Fund Management is jointly owned by Sealand Securities (51%) and Franklin Templeton (49%), with registered capital of RMB 220m ($31m), according to its website.

China Life Franklin Asset Management was founded in 2007. China Life Asset Management, China Life Overseas and Franklin Templeton hold stakes of 50%, 24%, 26% respectively, according to its website.

Part of the Mark Allen Group.