Value Partners joins the party with onshore fund

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Hong Kong-based Value Partners has joined Fidelity, UBS AM and Man Group with the launch of an onshore China fund, as momentum for foreign-managed products targeting China’s professional investors continues.

Eastspring moves into China with WFOE

The equity fund was launched through VP’s investment-management wholly foreign-owned enterprise (IM WFOE) in Shanghai. The firm did not disclose details about the product, but a Hong Kong-based spokeswoman told FSA it invests only in China’s A-shares.

The fund was launched on 12 January, according to the association’s record (in Chinese).

Similar to other PFM license holders, the firm is allowed to sell the product only to qualified (high-net worth and institutional) investors in mainland China.

Yu Xiaobo, head of China business, sees an increasing demand among China’s high-net worth individuals for investment products and is positive on China’s onshore equity market.

“MSCI index’s inclusion of A-shares, expected this summer, should introduce more foreign capital into the Chinese equity market. It is expected that the A-share market will develop further to match the investment pattern of institutional investors globally,” Yu said in a statement.

In late November VP obtained a private fund management (PFM) licence. Two months later, the firm’s onshore fund was approved.

Also in November, Invesco was granted the license but the firm has yet to launch onshore funds. However, Invesco will have to roll out at least one product by end of May at the latest because the authority places a six-month deadline for the first product launch to new license holders.

Among the PFM license holders, Fidelity is the pioneer in adopting the IM WFOE structure to enter China’s domestic asset management industry. It was among the first batch of foreign firms to establish a WFOE in Shanghai in 2015. It was then the first foreign asset manager to register as a private securities fund management firm with AMAC (in January 2017). Now it offers the most onshore products compared to other IM WFOEs, including one equity fund and two bond funds.

The prerequisite to launching an onshore private fund in China is operation of an IM WFOE, which makes the foreign manager eligible to apply for a PFM license. So far, there are at least 25 IM WFOEs established in the country, with the most recent being Nomura Asset Management and Franklin Templeton Investments. A Beijing-based spokeswomen confirmed to FSA earlier that Nomura Asset Management becomes the first Japanese asset manager to set up an IM WFOE. Franklin Templeton Investments converted its investment advisory WFOE to an IM WFOE on 18 December, according to its filings to China’s Ministry of Commerce.

However, with ten foreign firms holding PFM licences, only Fidelity International, UBS Asset Management, Man Investments and Value Partners have launched investment products. Fullerton has plans to launch an equity fund and Neuberger Berman plans to launch a fixed income fundFSA reported earlier.



PFM licence obtainedProducts launched

Fidelity International

January 2017China Bond No. 1 Private Fund

China Equity No. 1 Private Fund

China Bond Opportunity No. 1 Private Fund

UBS Asset ManagementJuly 2017

China Equity Private Fund Series 1

Fullerton Fund Management

September 2017
Man InvestmentsSeptember 2017英仕曼宏量1號私募基金

(A quantitative hedge fund, for which the firm does not use an English name.)

InvescoNovember 2017
Neuberger BermanNovember 2017
Value PartnersNovember 2017

Value Partners PFM Neo-China A Share Fund 1

Aberdeen Standard InvestmentsDecember 2017
BlackrockDecember 2017
SchrodersDecember 2017

Source: FSA


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