Neuberger Berman’s (NB) wholly foreign-owned subsidiary (WFOE) in Shanghai received approval from the Asset Management Association of China (AMAC) last week to launch a qualified domestic limited partnership (QDLP) fund, according to records from the association.
The Neuberger Berman Overseas Equity Investment No 2 Private Fund will be the firm’s second QDLP product. It launched its first QDLP fund in 2018, the records show.
The QDLP scheme allows foreign managers to raise money in China from qualified investors, with assigned quotas, to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and property.
FSA contacted the firm for more information, but the firm declined to comment.
Other firms that are expected to launch QDLP products this year include Oaktree Capital, Eastspring Investments, Allianz Global Investors and UBP. Meanwhile, Franklin Templeton China also received a QDLP license in June.
QDLP products are popular among investors in the mainland, with around 90% of them indicating they had invested in them, according to a survey conducted by Fleishman Hillard. While investors find them more expensive than products offered by domestic managers, they have continued to invest in them as they somewhat believe that the investment strategies of these products are clear and unique, and have also performed better compared to funds offered by local managers.
By April 2020, there were 40 QDLP funds offered by 28 managers, according to the report.
Besides its QDLP business, Neuberger Berman also manages seven private fund management (PFM) products in the mainland. 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.
In total, around 30 foreign asset managers have been granted PFM licences, offering at least 90 PFM products, according to AMAC records.
The firm also plans to tap China’s RMB 17.8trn ($2.63trn) retail fund market, as it also filed an application with the China Securities Regulatory Commission (CSRC) to establish a wholly-owned mutual fund firm in April this year.