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China stock market

Global fund managers win China approval to launch onshore funds as country opens up market

Value Partners says it is first Hong Kong-based asset manager to receive such a licence

PUBLISHED : Friday, 10 November, 2017, 5:56pm
UPDATED : Friday, 10 November, 2017, 5:56pm

Hong Kong-based Value Partners, US-based Invesco and Neuberger Berman have received licences in China to launch onshore investment funds that allows them to tap the 6 trillion yuan (US$903 billion) asset management market as the country eases access to its financial services sector.

The three firms’ wholly foreign owned enterprises in Shanghai received the Private Fund Manager (PFM) licence separately, said Asset Management Association of China, a self-regulatory body that oversees private funds in the country.

They join Fidelity International, UBS Asset Management, London-listed Man Group, and Fullerton Fund Management, owned by Singapore’s Temasek, which received their permits this year.

The PFM licence allows holders to launch private securities investment funds in China, which would invest in the country’s domestic securities market, and accept investment from qualified Chinese investors into such funds. Under the terms of the licence, asset managers are required to launch a product within six months of registration.

“We are excited to embark on this new phase of growth as we continue to strengthen our position as an investment solutions provider to investors in China and a China investments expert to investors elsewhere in the world,” said Dr Au King Lun, chief executive officer of Value Partners, in a statement on Friday.

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Value Partners said it was the first Hong Kong headquartered asset manager to receive such a licence.

“This registration is a key milestone in the evolution of our Asia business,” said Andrew Lo, senior managing director and head of Asia-Pacific at Invesco, in a separate statement.

“The private fund manager registration allows us the ability to manage and distribute a wide range of unique investment offerings to China’s vast network of private fund investors.”

On Thursday, China’s foreign ministry said the country would ease foreign investors’ access to banking, insurance, securities and funds.

Invesco, headquartered in Atlanta, has assets under management of over US$850 billion.

New York-based Neuberger Berman manages US$271 billion.

Value Partners, founded in 1993 by Hong Kong trader Cheah Cheng Hye and his partner V-Nee Yeh, currently manages US$16.5 billion of assets, one of the largest in Asia.

In June, China Securities Regulatory Commission said it would allow qualified wholly foreign-owned enterprises and joint ventures to apply for registration to engage in private securities fund management business in China, including securities trading in the secondary market.

The policy was among the outcomes of the eighth round of US-China Strategic and Economic Dialogue.

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