Global hedge firms to launch funds in China

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Two more foreign managers secure domestic licenses to launch onshore funds for China’s professional investors, according to the Asset Management Association of China (Amac) database.

US-based hedge fund Bridgewater Associates and British quant fund manager Winton Capital were the latest firms to register as private fund management (PFM) license holders from Amac, bringing a total of 13 foreign players holding the qualification.

It is the second batch of licenses issued by the association this year after Italian manager Azimut was approved in February.

In China, the PFM license is granted to both domestic and foreign managers. The license enables the firms to raise funds from domestic qualified (high net worth and institutional) investors for funds investing onshore. The majority of the foreign license holders are fund managers with a long-only emphasis, such as Fidelity Investments, Blackrock and Schroders.

Bridgewater and Winton registered their investment management wholly foreign-owned enterprises (IM WFOEs) with the Amac on 29 June. Both firms now face a six-month deadline to launch their first onshore product regulated under the PFM license as required by the regulation.

In May, Bridgewater received a licence for the qualified foreign institutional investor scheme (QFII), which allows foreign institutional investors to invest in onshore Chinese assets, within allocated quotas. The firm is currently waiting for quota to be issued, FSA reported earlier. The records from Amac show that the firm’s CEO for China business, Yan Wang is the representative for the six-member Shanghai entity.

The US firm manages around $160bn in assets on behalf of institutional clients, including corporations, pension funds, endowments and sovereign wealth funds globally.

Winton, which positions itself as a systematic and data-driven investment firm, established its WFOE in Shanghai in 2012. The Shanghai team has 11 people and the representative for the entity is Or Ching-ming, an SFC-licensed responsible officer for Winton in Hong Kong.

The firm distributes five offshore-regulated mutual funds covering the strategies of long-only European, US and global equity, absolute return and hedge fund strategies, according to FE data.

FSA sought more information on their product strategies but the firms did not respond in time for publication.

More foreign funds

To date, foreign managers collectively launched 14 private fund products onshore and the number is expected to grow to at least 17 by year-end.

UK-headquartered Man Group, which obtained its license in September last year, was the first foreign manager to roll out a quantitative PFM product in China. It has registered its second private fund with the Amac recently, but the firm refused to disclose if the new product also uses a quant strategy.

 

Source: Amac. * Chinese name only

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