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Value Partners readies more onshore products

The Hong Kong-based asset manager has registered its seventh onshore product and now has the most private fund management (PFM) products.

The Value Partners China Hongxin 1 Private Fund received approval earlier this month to be sold to China’s qualified (institutional and professional) investors.

This is the firm’s third onshore product this year and the seventh one since the wholly foreign-owned enterprise (WFOE) registered as a PFM firm in November 2017, according to records from the Asset Management Association of China (Amac).

A PFM licence allows foreign managers to offer onshore funds to domestic qualified investors.

Amac records show that so far, Winton Investment Management (Shanghai), the WFOE of British quant fund manager Winton Capital, owns six PFM products, making Value Partners the asset manager with the largest number of PFM products.

Value Partners now runs three WFOEs, two in Shanghai and one in Shenzhen.

In total, there are around 21 foreign firms with a PFM licence, which collectively have launched 46 products with RMB 5.4bn ($756m) in assets, according to a statement from the Amac.

Italian asset manager Azimut‘s new product, An Zhongxin Mix 2 Private Fund, also received approval from the Amac. The records show that its WFOE owns four PFM products.

In February 2018, the WFOE was granted registration as a PFM firm, FSA previously reported. In August, the first product, the Anzhong Mix 1 Private Fund, received approval.

FSA sought more information but the firm was not able to comment before publication.

Other firms are also ramping business in mainland China. Earlier this month, Blackrock was approved to launch its third onshore product, the China A-share Opportunity Private Fund II. The first onshore product, the China A-Share Opportunity Fund Phase I, was launched last year, FSA previously reported.

The product launches are against the backdrop of a gradual relaxation of onshore fund rules, which are part of the overall effort to open China’s financial markets to foreign players.

In June, for example, the regulator announced plans to widen the investment scope of foreign PFMs to include securities trading in the Hong Kong-China Stock Connect schemes, according to a Cerulli report.

Also this year, regulators said they will allow foreign PFMs to convert their business into a public fund management company, which would permit them to distribute to the RMB 13.9trn retail investor base, without first closing their PFMs.

Dual track

Value Partners is also a qualified domestic limited partnership (QDLP) license holder and has launched two QDLP products, according to a spokeswoman from the firm.

A QDLP licence allows foreign managers to raise money domestically to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and real estate, within allocated quotas.

The dual-track onshore strategy, in which a firm has both a PFM and a QDLP licence, is also employed by UBS Asset Management, Aberdeen Standard Investments, Mirae Asset and others.

Part of the Mark Allen Group.