Pictet AM is following up quickly on the announcement that it received a QDLP licence with the planned launch of the Pictet Special Situation Private Securities Fund No.1.
This is an absolute return long/short credit strategy, focusing on financially stressed and distressed companies, predominantly in Europe.
It will enable the fund house to capitalise on the QDLP scheme, which since launching as a pilot in Shanghai in 2013 has allowed licensed foreign asset managers to raise renminbi-denominated sums from qualified individuals and institutions in China, with assigned quotas, to invest in offshore traditional and alternative investments. The range of approved products includes overseas equity and bond funds, hedge funds, private equity and real estate investment trusts.
More broadly, this marks an important next step in the expansion of Pictet AM’s China business.
“We are committed to providing qualified investors in China with more diversified global investment opportunities over the long term,” Junjie Watkins, chief executive officer for the firm in Asia ex Japan, said in a statement.
This is pressing for investors, which face challenges from a mix of low yields, stretched valuations and market volatility. Liquid alternative investments to diversify risk and return profiles are increasingly in demand.
Pictet AM is a leading European alternatives manager with $45bn in AUM as at end-2020.
The firm has also been investing in China onshore for global clients via several programmes, such as the Renminbi Qualified Foreign Institutional Investor (RQFII) programme, Shanghai-Hong Kong Stock Connect, Bond Connect and China Interbank Bond Market (CIBM) Direct Access.
Further, it has been cooperating with global banks onshore in China under the Qualified Domestic Institutional Investor (QDII) scheme to enable Chinese institutional and high net worth individuals to access overseas markets. In July 2020, Pictet AM launched its first northbound fund under the Mutual Recognition of Funds (MRF) scheme.
Separately, Blackrock said this week that it has raised RMB6.7bn ($1bn) for its mutual fund in China – understood to be the first time for a mutual fund run by a foreign company that is allowed to sell to Chinese individuals.
The BlackRock New Horizon Mixed Securities Investment Fund attracted more than 111,000 subscribers over a five-day fundraising period the ended September 3.
“We are very pleased with the official establishment of our first mutual fund in China. The support and trust from our investors and distribution partners have been extremely encouraging. We are committed to bringing long-term investment opportunities for Chinese investors, leveraging our track record in investing in A-shares and our expertise in investment and risk management to help more investors improve their financial well-being,” Chi Zhang, Blackrock Fund Management’s general manager, said in a statement.