UBS Asset Management’s Shanghai-based wholly foreign-owned enterprise (WFOE) last week received approval to launch three private fund management (PFM) products in the mainland, according to records from the Asset Management Association of China (Amac).
They are the China Equity Select Private Security Investment Fund No. 7, the China Equity Select Private Security Investment Fund No. 2 and China Equity Select Private Security Investment Fund No 3.
Having 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.
FSA sought more information from the firm, but it was not able to provide additional details in time for publication.
UBS AM now manages 13 PFM products in China, which include one that was registered with the Amac earlier this month. Among all foreign PFM licence holders in China, the firm now has the most number of PFM products in the mainland, followed by Hong Kong-based Value Partners, which has eight PFM funds and UK-based Winton Capital with seven products, Amac records show.
Fundraising difficulties?
However, not all PFM products launched by foreign players have gained traction, according to a recent Z-Ben Advisors report.
Ten products from four foreign managers each have less than RMB 5m ($715,000) in assets. UBS AM heads the list with six of those products, including its tenth fund, which means most of the firm’s AUM sit in its first four products, the report said. Fidelity comes next with two mini bond funds, while Alliance Bernstein and Value Partners each have one tiny equity fund.
“Liquidation, however, isn’t knocking – yet,” the report noted.
More foreign fund managers are expanding into China via the PFM route, including Schroder Adveq, which received the licence last week, and Hong Kong-based BEA Union Investment, which received its PFM qualification in January.
In total, there are two dozen foreign PFM licence holders that have launched 68 onshore funds, according to latest data from Amac.
