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French quant firm enters China’s PFM market

Metori Capital is the first foreign fund manager to set up a WFOE in Zhuhai, which is in the Greater Bay Area. Separately, Oaktree Capital has also received the PFM qualification.

Paris-based Metori Capital Management’s wholly foreign-owned enterprise (WFOE) in Zhuhai last week has received a private fund management (PFM) licence in China, according to records from the Asset Management Association of China’s (AMAC) records.

A PFM licence enables foreign entities to develop and sell funds investing in onshore assets to domestic qualified investors, which include institutional and high net worth investors.

Metori Capital is a pure-play quantitative asset manager. It was founded in 2016 by a group of professionals from Lyxor Asset Management, according to the firm’s website.

With its PFM qualification, the firm plans to launch a quant strategy focusing on onshore Chinese futures contracts, according to Gilbert Tse, Metori’s head of China.

Other foreign quant managers have entered China’s PFM market, which include US-based Two Sigma, UK’s Winton Capital, DE Shaw and Man Investments.

GBA talent

This is the first time that a foreign asset manager set up a WFOE in Zhuhai, a city in Guangdong province, which is also included in the Greater Bay Area (GBA), according to Amac records.

Metori’s Tse explained that many domestic quantitative research and investment firms in China have established in Hengqin, which has facilitated the growth of talent for quant investments.

“Being located in the Greater Bay Area with Hengqin as our headquarters is conducive to our tapping talent and other resources from Guangdong, Hong Kong and Macao, while covering business opportunities in Southern China and the rest of the country,” Tse said.

Oaktree Capital

Meanwhile, Los Angeles-based Oaktree Capital’s Beijing-based WFOE has also received the PFM qualification from AMAC.

This move comes after the firm received a green light from China’s regulator to establish a wholly foreign-owned enterprise (WFOE) in the capital earlier this year.

FSA sought more information from Oaktree Capital, but the firm declined to provide more details.

Other foreign firms that obtained the PFM qualification this year include Power Corporation of CanadaIncome PartnersRussell InvestmentsSchroder Adveq and BEA Union Investment.

Oaktree Capital also has a Shanghai-based WFOE, the Oaktree Overseas Investment Fund Management (Shanghai), which was established in 2013 and manages two qualified domestic limited partnership (QDLP) products.

The QDLP scheme allows foreign fund managers based in the city, within assigned quotas, to invest in offshore traditional and alternative investments, including overseas equity and bond fund funds, hedge funds and property.

Part of the Mark Allen Group.