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Fullerton launches onshore fund in China

Fullerton Fund Management, owned by Singapore state-run Temasek, has become the latest asset manager to be granted approval to sell an onshore private fund in China.
Eastspring moves into China with WFOE
Aerial view of modern skyscrapers in Shanghai.

Fullerton Investment Management (Shanghai), the firm’s investment management wholly foreign-owned enterprise (IM WFOE), has announced the launch of the Fullerton Absolute Return China A Strategy Series 1 Private Fund. The approval from the Asset Management Association of China was obtained on February 12.

The fund is the firm’s debut product in China after becoming a private fund management (PFM) license holder in September last year.

Similar to three other equity funds launched by foreign managers, the product invests primarily in China’s A-shares. The lead manager for the fund is the firm’s head of China equities Jason Zhu.

The product is distributed through Hong Kong-listed brokerage China Galaxy Securities.

Mark Li, general manager for the Shanghai team, said in a statement that the fund launch will pave the way for future launches nationwide and for expanding product offerings to meet the needs of investors.

China is a long-term growth and strategic market for the firm and it will continue to offer investment capabilities to qualified Chinese investors while providing investment services to the rest of the world, Jenny Sofian, chief executive officer said in the statement.

Fullerton, which is owned by Singapore government-run Temasek Holdings, has a team of 13 in Shanghai, up from six in 2016. It is the first Singapore-based asset manager to be granted a PFM license.

The prerequisite to launching an onshore private fund in China is operation of an IM WFOE, which makes the foreign manager eligible to apply for a PFM license. So far, at least 25 IM WFOEs have been established in the country, with the most recent being Nomura Asset Management and Franklin Templeton Investments.

However, only 10 of them are eligible to sell fund products onshore.

Among the PFM license holders, Fidelity is the pioneer in adopting the IM WFOE structure to enter China’s domestic asset management industry. It was among the first batch of foreign firms to establish a WFOE in Shanghai in 2015. It was then the first foreign asset manager to register as a private securities fund management firm with AMAC (in January 2017).

Now it offers the most onshore products compared to other IM WFOEs, including one equity fund and two bond funds.

Chinese authorities impose a six-month deadline for the first product launch on new license holders. Therefore, at least five more products could be launched onshore by June.



PFM licence obtained Products launched

Fidelity International

January 2017 China Bond No. 1 Private Fund

China Equity No. 1 Private Fund

China Bond Opportunity No. 1 Private Fund

UBS Asset Management July 2017 China Equity Private Fund Series 1
Fullerton Fund Management September 2017 Fullerton Absolute Return China A Strategy Series 1 Private Fund
Man Investments September 2017 英仕曼宏量1號私募基金

(A quantitative hedge fund, for which the firm does not use an English name.)

Invesco November 2017
Neuberger Berman November 2017
Value Partners November 2017 Value Partners PFM Neo-China A Share Fund 1
Aberdeen Standard Investments December 2017
Blackrock December 2017
Schroders December 2017

Source: FSA

Part of the Mark Allen Group.