Quant firm launches more China onshore funds

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Winton Capital rolls out quant products while Alliance Bernstein, Allianz Global Investors and DE Shaw receive private fund management (PFM) licences in China

Quant asset manager Winton Capital is leading the pack of foreign asset managers that have registered as private fund managers (PFM) in China in terms of the number of funds launched.

Having a PFM licence enables foreign firms to launch onshore funds to the country’s qualified investors, including high net worth and institutions.

UK-based Winton has introduced six onshore funds as of the end of April. All products are futures quantitative funds or commodity trading advisor (CTA) products, according to a Cerulli Associates report.

Following Winton in terms of the number of fund launches are Fidelity, Value Partners and Schroders, with each having launched four traditional equity or fixed income products.

Winton launched its first onshore product in July last year, right after it received its PFM licence, according to Miao Hui, Singapore-based senior analyst at Cerulli. It then decided to roll out three more private funds in October and two in December.

FSA sought more information from Winton Capital, but the firm was not able to elaborate on its China strategy, AUM raised or distribution channels in time for publication.

Miao explained that Winton, which is one of the biggest CTA managers globally, has been in China for several years.

“Before it launched its first private fund in 2018, Winton was already well-known in the industry,” she said.

For example, the firm has been providing advisory services to Hwabao WP Fund Management’s segregated accounts since 2012, according to Miao.

Founded in 2003, Hwabao WP was previously Fortune SG Fund Management until 2017. At the time, the original foreign shareholder of Fortune SG, Lyxor Asset Management, transferred its 49% stake to Warburg Pincus Asset Management. The remaining stake is owned by Hwabao Trust.

Winton established its local investment management team in China in 2012, according to the firm’s website.

“We have been successfully advising Chinese investors in Chinese futures markets for eight years, and we look forward to developing our business in Chinese equities and futures markets in the years ahead,” said David Harding, Winton’s founder, CEO and co-chief investment officer, in a statement issued when the firm received its PFM licence last year.

Winton’s Shanghai-based office has 11 people. Globally, it manages around $20bn in assets, according to its website.

Other quant players

Of the 18 foreign PFMs in the mainland, only two managers offer onshore quant funds – the other being Man Group, which has launched one CTA fund and an equity quantitative product, according to the report.

New York-based DE Shaw, which received its PFM licence in April, is also expected to launch quant funds in China.

Separately, Alliance Bernstein and Allianz Global Investors were among the most recent fund managers to obtained PFM licences, which were granted in March, according to the Cerulli report. Neither firm has launched onshore products yet.

In total, at least 35 onshore products are run by foreign fund managers.

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