APS Asset Management has partnered with Beijing-headquartered asset and wealth management firm China Foreign Economy and Trade Trust Company to launch a private fund management (PFM) product.
APS AM’s Shanghai-based wholly foreign-owned enterprise (WFOE) received regulatory approval last week to launch the Foreign Trade Trust – Longxin No 5 Securities Investment Collective Capital Trust Plan Fund, according to records from the Asset Management Association of China (Amac).
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.
The records show that APS AM will act as the advisor of the product. However, the records do not specify the role of China Foreign Economy and Trade Trust Company, which offers other fund products to qualified investors in the mainland, according to its website.
FSA sought more information from both firms, but they did not reply in time for publication.
This will be the first time that APS AM will act in as an advisor for a PFM product. Previously, it has launched three other PFM funds, all receiving regulatory approval last year.
Separately, APS AM announced earlier this year that it will be liquidating its Asia-focused funds and only manage China-related strategies.
“We decided after much deliberation and discussion that going forward, we would focus solely on China,” the firm said at the time.
The firm has been managing China-focused strategies for nearly two decades. For example, it launched its first China A-share strategy to offshore investors in 2004, after it established a research presence in Shanghai in 2002.
In 2018, the firm received its private PFM licence from Amac.
Just last week, Korea’s Mirae Asset Global Investments received approval from the Amac for its to launch its second PFM fund.
The advisory route
Like APS AM, Neuberger Berman is also acting as an advisor for two PFM products in the mainland. However, to act as an advisor, foreign firms would need an advisory qualification from the Amac in addition to their PFM licences.
An advisory licence enables a foreign manager to advise domestic fund management firms and distributors on specific investment products. Besides APS AM and NB, there are at least seven other foreign players holding the licence, including Value Partners, Winton Capital, UBS Asset Management, Aberdeen Standard Investments, Blackrock, Bridgewater Associates and Fullerton Fund Management, Amac records show.
