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Three foreign firms approved for onshore funds

Among them, Nomura AM has had its first onshore fund authorised by the Asset Management Association of China (Amac).

The three private fund management (PFM) products are the Nomura China Stock Select No. 1 Private Securities Investment Fund, the UBS China Ruixiang Bond Strategy No. 5 Private Securities Investment Fund and the Fullerton China Huirong Phase I Private Securities Investment Fund.

The firms received approval on Wednesday and their funds will be targeting China’s institutional and professional investors, according to Amac records.

Foreign managers holding a PFM licence can develop and sell funds investing in onshore assets to domestic qualified investors.

This is the first onshore fund from Nomura Investment Management (Shanghai), the wholly foreign-owned enterprise (WFOE) of the Tokyo-based asset manager. The WFOE was registered with the Amac in June.

Last year, Nomura’s mainland entity also obtained approval from the Amac for the qualified domestic limited partnership (QDLP) license, which enables foreign firms to raise money domestically to invest in offshore assets, with assigned quotas.

In November 2018, the firm registered its first QDLP product, the Nomura Japan High Conviction Overseas Private Fund, which is a Japan-focused equity fund. It is also the first Japanese equities product under the QDLP programme.

For Fullerton Investment Management (Shanghai), the WFOE of Temasek-owned Fullerton Fund Management, it is the firm’s third onshore fund. It obtained a PFM licence in September 2017 and launched an onshore equity fund in February last year.

Fullerton has 17 staff in Shanghai, which include nine investment professionals, Mark Li, the WFOE’s Shanghai-based general manager and head of China sales told FSA previously. A majority of the investment staff focuses on equities, with only two fixed income analysts. The firm is also mulling plans to obtain a QDLP licence, FSA previously reported.

FSA contacted the firms but they were unable to provide more details in time for publication.

Booming onshore

As of 9 August this year, 21 foreign firms hold a PFM licence and collectively they have launched 46 products with RMB 5.4bn ($765m) in assets, according to a statement from the Amac.

However, the Amac information does not include recent product launches, which seem to be accelerating. Last month, for example, Barings launched its first PFM product, the China A-share Private Securities Investment Fund No 1.

UBS Asset Management now has the most PFM products with nine, followed by Value Partners which manages eight funds and British quant fund manager Winton Capital which now runs seven onshore products.

UBS’s Shanghai WFOE has 32 staff and registered capital of $30.5m, according to Z-Ben Advisors.

Part of Mark Allen.