Unlike the private fund management (PFM) license holders who are permitted to invest onshore to serve domestic qualified investors, the QDLP managers are allowed to raise money domestically to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and real estate.
Therefore, with the QDLP approval, NB is now allowed to gather assets in China from professional investors and invest onshore through its PFM WFOE and offshore via the QDLP scheme.
Among 17 QDLP quota holders, only Blackrock, Man Group, NB, UBS Asset Management and Value Partners operate PFM WFOEs.
NB would not disclose the amount of the quota granted by the authority. A Hong Kong-based spokeswoman for the firm confirmed that the license was obtained on 9 May. The WFOE is led by Patrick Liu, NB’s head of China, and has 20 people on the team, she added.
The spokeswoman told FSA that the firm plans to distribute an overseas private equity product to Chinese qualified investors. The product is currently managed by a team based outside of China.
NB is the second foreign asset manager to obtain approval to sell a QDLP product in 2018. Last month, BNP Paribas Asset Management obtained a $50m quota for the programme. The firm said it will use the quota to launch a water resource-related product based on what it believes is robust interest from China investors for ESG themes.
There are at least 11 pending QDLP applications from foreign asset managers, according to the Shanghai Administration for Industry and Commerce and the Asset Management Association of China.
The firms in the queue seeking official confirmation include JP Morgan Asset Management, Aberdeen Standard Investments and Nomura Asset Management.