It is the third WFOE to launch an onshore fund targeting China’s qualified investors.
The PFM licence allows foreign firms to launch onshore fund products to domestic qualified investors (high net worth individuals and institutional investors), but face a six-month deadline for bringing a fund to market after obtaining the licence.
In May, Fidelity’s WFOE launched a fixed income fund and UBS launched an equity fund last month. Fidelity expects to launch its second product by the end of the year. Fullerton intends to launch an equity fund and Neuberger Berman plans a fixed income fund.
Man’s onshore product is the first hedge fund managed by a foreign firm’s WFOE.
The fund will invest in liquid onshore markets and focus on listed futures, including agricultural commodities, industrial commodities, bonds, metals, energy and stock indices, according to a statement from the firm. ICBC will act as custodian for the fund.
The strategy will use quantitative investing combined with local investment capabilities to serve domestic investors, Yifei Li, chair of Man Group China, said in the statement.
Recent figures show that private fund industry assets surpassed RMB10trn ($1.51trn) at the end of August, according to data from the Asset Management Association of China (AMAC).
“The [PFM] registration process will be smoother for managers now, compared to last year, given the [eight] successful cases,” said Miao Hui, senior analyst at research firm Cerulli.
Foreign firms are keen to set up an investment management WFOE to launch products. So far, there are eight foreign firms that have obtained PFM licences out of 22 IM WFOEs, with Aberdeen Standard Investments being the latest to obtain the licence.
However, Chinese regulators have not yet clarified whether WFOEs can be granted mutual fund licenses to sell products to retail investors.
|
Firm |
PFM licence obtained | Products launched |
|
Fidelity International |
January 2017 | China Bond No. 1 Private Fund |
| UBS Asset Management | July 2017 |
China Equity Private Fund Series 1 |
|
Fullerton Fund Management |
September 2017 | – |
| Man Investments | September 2017 |
A quantitative hedge fund Name in Chinese available on AMAC’s website |
| Invesco | November 2017 | – |
| Neuberger Berman | November 2017 | – |
| Value Partners | November 2017 | – |
| Aberdeen Standard Investments | December 2017 | – |
