Neuberger Berman seeks to expand in China

19 April 2017   Category: News, Asia, China, Global, USA   By Asia Asset Management

US-based asset manager Neuberger Berman plans to expand its business in China with the opening of an investment management subsidiary in Shanghai with wholly foreign-owned enterprise (WFOE) status.

Neuberger Berman will manage and distribute private funds to clients in the Mainland, including private banks, independent wealth management platforms, and local institutions, via the subsidiary – Neuberger Berman Investment Management (Shanghai) Ltd – once its WFOE registration is completed, the company said in a statement on Tuesday (April 18).   

A WFOE investment management licence allows foreign asset managers to offer various investment solutions to Mainland institutional investors.

“As we further expand our investment and client coverage presence in the Asia Pacific region, China represents a significant growth opportunity for Neuberger Berman,” Nick Hoar, head of Asia Pacific at Neuberger Berman, says in the statement.

The company appointed Patrick Liu, former chief executive officer of HFT Investment Management, as head of China and general manager of Neuberger Berman Investment Management (Shanghai) in February this year.

It has taken two years since the launch of the WFOE programme in 2015 for the Chinese government to allow WFOE participants to access the onshore fund business market.

Manulife Investment (Shanghai), a subsidiary of Canadian insurance giant Manulife Financial Corp, secured the first WFOE investment management licence last month.

Mr. Liu tells Asia Asset Management that he expects more foreign companies to set up WFOEs, intensifying competition among them over the next few years. “However, we remain sanguine about the future of the WFOEs as the capacity of the domestic asset management industry is large and continues to grow strongly. We believe that the key to success is to focus on our strengths and beliefs to establish a clear and strong identity in the industry,” he says.

Neuberger Berman has been expanding its China-related business over the past few years. It received its first Qualified Foreign Institutional Investor (QFII) quota in 2012, and won a multi-asset mandate from the country’s supplementary retirement fund in the same year.

Neuberger Berman had approximately US$255 billion in total AUM globally as of December 31, 2016.