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US alts firm sets up Beijing WFOE

Other alternative asset managers have also established their presence in China.

Los Angeles-based Oaktree Capital has been given the approval last week to establish a wholly foreign-owned enterprise (WFOE) in Beijing, with a registered capital of $5.42m, according to a statement from the Beijing Municipal Financial Supervision Authority.

Founded in 1995, the alternatives firm manages $120bn. The firm started tapping into China’s non-performing loan market in 2015 and today manages around $6.5bn in non-performing loan assets, the statement said.

Globally, the firm manages credit, real assets, private equity and listed equities strategies, according to the firm’s website.

FSA sought more information from Oaktree Capital, but the firm declined to provide more details about the WFOE.

The firm also has a Shanghai-based WFOE, which has a qualified domestic limited partner (QDLP) licence that it obtained in 2014, according to records from the Asset Management Association of China.

The QDLP programme allows foreign managers to raise money in China, with assigned quotas, to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and property.

The Shanghai WFOE manages only one QDLP product, which is the Shanghai Oaktree Phase I Overseas Investment Fund Partnership, which was registered with the Amac in 2016.

Oaktree employs staff globally and has offices in Asia, including Hong Kong, Tokyo, Singapore and Seoul, according to the firm’s website.

Other offshore asset managers have also established alternative businesses in China.

For example, Schroder Adveq, which manages private equity assets and venture capital, received a private fund management (PFM) licence this month. Meanwhile, Hong Kong-based Value Partners has a Qualified Foreign Limited Partnership (QFLP) licence, which enables firms to raise money from onshore and offshore clients for private equity projects in the mainland.

Part of the Mark Allen Group.