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Value Partners in onshore fund push

In total, foreign players have launched nearly 80 onshore funds in the mainland via the PFM route.

Value Partners’ Shanghai-based wholly foreign-owned enterprise (WFOE) has received regulatory approval to launch another private fund management (PFM) fund in the mainland, according to records from the Asset Management Association of China.

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.

The new product is the Value Partners China Anxin Value Hugangshen No 1 Private Securities Investment Fund.

FSA sought more information from Value Partners, but it declined to provide additional details.

The move comes after the firm received a greenlight last month to roll out two other PFM funds. In total, Value Partners manages 11 PFM funds.

Among the 26 foreign PFM licence holders, Value Partners has the second largest number of onshore products launched in the mainland. Leading the race is UBS Asset Management, which manages 15 PFM products.

Besides its PFM business, the firm also manages two qualified domestic limited partnership (QDLP) products, according to Amac records. The QDLP scheme 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.

In addition, Value Partners’ Shanghai WFOE obtained an investment advisory qualification in February this year. The qualification enables WFOEs to cooperate with institutions like securities and futures firms, banks, insurers, trusts and wealth management companies, to offer investment advisory services on their issued private fund products.

Growing number of funds

Other fund houses are increasingly launching onshore funds as China continues to open its financial services industry. During the first quarter, 10 PFM products received approval from the Amac, compared with five during the same period last year.

In total, 78 onshore funds have been launched by foreign PFM licence holders, with total AUM of RMB 7.88bn ($1.11bn) as of the end of 20 March, according to a statement from Amac.

A majority of foreign PFMs have not been able to raise assets above the RMB 1bn ($140m), according to a Cerulli Associates report. As of the end of 2019, 11 firms have assets in the RMB 100m-1bn range, while nine have assets below RMB 100m.

Separately, several asset managers have also obtained the PFM qualification this year, including Income PartnersRussell InvestmentsSchroder Adveq and BEA Union Investment.

Part of the Mark Allen Group.