HAPFS issues mandates for A-share investments

03 April 2012   Category: News, Asia, China, Hong Kong   By Hui Ching-hoo

Hong Kong’s Hospital Authority Provident Fund Scheme (HAPFS) is looking for a broker, a bond manager and an equities investment manager to oversee its A-share investments. 

This follow on from the fund’s ORSO scheme being awarded a qualified foreign institutional investor (QFII) license from the China Securities Regulatory Commission (CSRC) in late January this year. Heman Wong, executive director of HAPFS, notes that the scheme is still waiting for approval of the quota from the State Administration of Foreign Exchange (SAFE).

Explaining the rationale behind the appointments, Mr. Wong says: “As the QFII quota will be invested in the bond and equity markets, we will have to appoint one bond manager and one A-share manager instead of hiring a balanced fund manager.” Under Chinese regulations, each QFII participant is allowed to appoint two brokers for the Shenzhen and Shanghai exchanges, but the HAPFS prefers to appoint just one, Mr. Wong explains.

Separately, Mr. Wong said the HAPFS has hired two new US small-cap managers to replace the previous manager (TCW Asset Management Company), although he declined to name them.

Last year, HAPFS terminated one investment manager from its fund of hedge fund (FoHF) strategy (FRM Investment Management Ltd) and one from its emerging market mandate (RCM Asia-Pacific Ltd). It subsequently filled the vacancies with Fauchier Partners (for the FoHF strategy) and Capital International (for the emerging market mandate).