T Rowe Price Group said today that it has opened an office in Shanghai, after receiving a licence to set up an unregulated wholly foreign-owned enterprise (WFOE) on 18 December 2020.
It is the firm’s first-ever office in mainland China, and is being headed by Dai Wang, who has re-located from Hong Kong where he was a research analyst in T Rowe Price’s equity division covering Asian stocks in Hong Kong.
Wang, a Chinese national, is joined in the investment research office by two locally based associates.
“We are not shifting people wholesale from Hong Kong to Shanghai, but by opening the new office we are able to recruit people locally and tap into that undoubted growing source of talent,” a spokesman told FSA.
Their research will extend to medium- and small-cap companies in addition to the familiar mega-cap names, and will be incorporated in the firm’s global investment strategies, according to the spokesman.
There are no immediate plans to apply for inclusion in other asset management schemes, such as the private fund management licence (which enables foreign firms to raise renminbi from wealthy and institutional investors in China for onshore investment), the qualified domestic limited partner licence (which allows them to tap the same investors for quota-allocated overseas investment) or a public mutual fund management company licence (which provides access to the China retail investor market).
RESEARCH FOCUS
“Fundraising and product distribution are not a concern at the moment,” said the spokesman.
“Right now, our focus is on expanding our research coverage to support our global research platform and our investments in Chinese securities. We will continue to service Chinese institutional clients investing globally via our distribution team based in Hong Kong,” he said.
The firm has two China-focused strategies managed out of Hong Kong, the Asian ex-Japan Equity Fund and the China Evolution Equity Fund (which was authorised by Hong Kong’s Securities and Futures Commission for sale to retail investors last month), the regulator’s website shows.
Through its Qualified Foreign Institutional Investor licences and the Shanghai-Hong Kong and Shenzhen-Hong Kong Connect schemes, T Rowe Price had invested $4.77bn into securities listed in Mainland China as of 31 December 2020, plus $36.92bn invested in Chinese securities listed on offshore exchanges, according to a statement by the firm.
“The new office will amplify our ability to conduct investment research locally and seize opportunities in the Chinese market for our clients. We look forward to welcoming onboard new mainland Chinese colleagues who will play an essential role in unearthing a wide range of carefully selected high-quality companies with strong future outlooks in the Chinese market,” said Justin Thomson, head of international equity and co-head of global equity, in the statement.
“We continue to closely monitor developments in the market and seek opportunities to work with clients who share our long-term focus,” added Elsie Chan, head of Asia ex-Japan distribution.
Founded in 1937, Baltimore-based T Rowe Price Group had $1.46trn in AUM as 31 January 2021. Shanghai joins Hong Kong, Tokyo, Singapore, Sydney and Melbourne as the firm’s sixth location in Asia Pacific.
