Man Group gets China approval to launch onshore private fund

The world’s largest publicly traded hedge fund will launch a private investment fund targeting high net worth individuals and institutions

PUBLISHED : Friday, 08 September, 2017, 1:48pm
UPDATED : Friday, 08 September, 2017, 1:49pm

Man Group, the world’s largest publicly traded hedge fund, has received a Chinese license to launch an onshore private securities investment fund, a step that will allow the firm to further expand into China’s 6 trillion yuan asset management market.

The London-listed hedge fund is among the first major foreign firms to receive such approval since China loosened regulations for global fund managers to enter its investment market in June.

“The Private Securities Investment Fund Manager (PFM) license is the next stage of Man Group’s long-term strategy to build our presence in the world’s second largest economy,” said Luke Ellis, chief executive of Man Group, in a company statement on Thursday.

“We strongly believe that there has been a growing appetite from the Chinese institutional investment community for the products we will offer under the new license, and we look forward to continuing to develop our business in the region.”

The PFM license allows holders to develop onshore investment products for both institutional and high net worth investors in China. Under the license, asset managers are required to launch a product within six months after registration.

The license has been granted to Man Investment Management (Shanghai), a wholly owned foreign enterprise incorporated by Man Group in Huangpu District, Shanghai, the statement said.

Information from the Asset Management Association of China (AMAC) showed Man Investment Management was established in May with registered capital of US$1 million.

Man Group set up its China office in 2012. In 2013, it was granted a quota under the Qualified Domestic Limited Partnership scheme to raise funds from domestic Chinese investors for overseas investment.

Yifei Li, chairperson of Man Group China, said the opportunity to develop onshore investment products “opens a new chapter” for the company in China.

“China’s increasingly sophisticated markets offer a wealth of investment opportunities and we look forward to combining our global insight with our local presence as we develop strategies for Chinese investors,” said Tim Wong, chairman of Man Group Asia.

In June, 2016, the China Securities Regulatory Commission announced it will 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 is among the outcomes of the eighth round of US-China Strategic and Economic Dialogue.

In January, Fidelity International announced it became the first global asset manager to receive a Chinese license for private fund management. In June, UBS Asset Management also said it won a PFM license.

Man Group has US$95.9 billion in funds under management through five investment management businesses, including Man AHL, Man Numeric, Man GLG, Man FRM and Man GPM.

In the first half of this year, the hedge fund reported a record net inflow of US$8.2 billion, up from US$1 billion in the same period last year, as investor interest has risen amid a global market recovery. However, Ellis said the momentum was unlikely to continue and expected the pace of net inflows to moderate in the second half.