The Singapore-headquartered distributor intends to add more private funds in China this year to serve qualified domestic investors, according to the firm’s annual report.
The firm’s China distribution business was launched in March 2016 and it has since onboarded 75 fund houses with 3,300 fund products for sale to Chinese investors, a Singapore-based firm spokeswoman told FSA.
“But private funds only make up a very small percentage of our fund offerings in China,” she said.
Currently, private funds on the platform also include those managed by foreign fund managers that have an onshore PFM licence, she added. A PFM licence enables foreign players to manufacture China onshore products for qualified investors in the country, which include high-net-worth individuals and institutions.
There are around 18 foreign firms with a PFM licence. Of the 18, 14 have launched at least 30 onshore funds for qualified investors.
The spokeswoman noted, however, that the firm does not include qualified domestic limited partnership (QDLP) products on its China platform. These products are managed by foreign managers that have a QDLP licence, which allows them to raise onshore money to invest in offshore investments, including traditional and alternative products.
Domestic clients who want offshore exposure can invest through the qualified domestic institutional investor (QDII) funds, which are managed by domestic asset managers and are on the firm’s platforms, she said
The firm’s onshore business continues to be small, however. Its assets under administration stood at around RMB 478m ($69.2m) as of the end of March, which is 18% higher compared to the beginning of last year, according to the spokeswoman.
Total AUA was S$8.75bn ($6.34bn) at the end of March, according to the firm’s quarterly report. Singapore accounts for 66% of the business, followed by Hong Kong at 24%. The firm also markets its platform in Malaysia and India.
The firm has two main strategies to grow its business in China, according to the spokeswoman. The main revenue generator is a B2B distribution business that connects fund houses with wealth and financial advisors who bring investment products to their clients.
The other is a wealth business with advisors providing investment advice to clients. In China, the firm said it has a total of 50 financial advisers in Shanghai and Shenzhen.