Shenzhen firm will be among second batch of fund managers to apply for licence to invest overseas China Southern Fund Management, one of the country's largest fund houses, is prepared to apply to be a qualified domestic institutional investor (QDII) among the second batch of fund houses wishing to invest overseas, according to a senior company manager. The Shenzhen-based company had started to prepare the QDII products, although it had yet to submit the application to the regulator, assistant general manager Xie Ailong said. Mr Xie said the company was looking for professionals with overseas investment experience and preferably practice licences in Hong Kong or other countries to fill fund manager positions to run the products, which will be launched soon. China Southern Fund, set up in 1998 as the first fund house in the country, is among at least five fund management companies planning to apply for the QDII licence, which is expected to be granted in the first quarter of next year. Shanghai-based Hua An Fund Management was the first to get the green light to raise the country's first fund in foreign currencies to invest overseas, marking the first time for mainland investors to access global financial assets, including fixed-income products, equities and real estate investment trusts. Compared with banks, fund houses have a wider spread in investing overseas other than fixed-income products. In September, Hua An got a subscription of US$200 million, or 40 per cent of the quota granted by the regulator, which was seen as a better performance than that of the QDII products launched by domestic banks. The QDII scheme allows mainland financial institutions such as banks, insurers and fund management companies to loosen their grip on yuan outflows. Hong Kong, as Asia's financial hub, is expected to benefit the most due to its geographical advantage. 'Our products will be different from Hua An's,' said Mr Xie, who oversees the company's international business. He declined to elaborate but stressed that the company would be more investor-oriented. China Southern Fund manages nearly 100 billion yuan in four closed-end funds, nine open-end funds and three pension funds, according to a statement on its website. Hua An chose United States investment bank Lehman Brothers as its partner for overseas investments. Lehman Brothers was in charge of choosing specific equities and products, Hua An executive vice-president Frank Yao said in September. According to a statement, Lehman Brothers Finance, a subsidiary of Lehman Brothers, will guarantee the principal for a five-year structured note issued specifically to support the fund. Raised in US dollars through a private placement, the fund is expected to have an annual return of 10 per cent.