French asset manager Amundi will manage the investments of Vanguard Group’s two Mandatory Provident Funds (MPF) in Hong Kong with nearly US$3 billion of assets as the US asset manager exits the city and moves its Asian headquarters to Shanghai.
They have reached an agreement to transfer the Vanguard Moderate Fund and Vanguard Income Fund to Amundi subject to regulatory approvals, the companies say in a joint statement on June 23.
The funds are default investment strategy or DIS funds. These are funds into which contributions are channelled if MPF members do not provide investment instructions.
The two Vanguard funds had combined assets of $2.79 billion as of March 2021, less than 2% of the approximately HK$1.17 trillion ($150 billion) MPF market.
Vanguard has been in Hong Kong since 2013 and entered the MPF market in 2017. The company says it “planned an orderly exit from the MPF DIS market as part of its exit from the Hong Kong institutional funds market”.
Vanguard announced its move to Shanghai last August. The process is still ongoing. The company is keeping the Hong Kong office, but hasn’t detailed its future role.
“We are grateful for our clients’ loyalty over the years and pleased that we are able to affect a seamless transition of investment management responsibilities to the team at Amundi,” Scott Conking, head of Vanguard Asia, says in the statement.
“Amundi has been serving Hong Kong MPF investors since 2006 and we look forward to continuing to contribute to the retirement investment market…,” adds Xiaofeng Zhong, Amundi’s chairman for Greater China.
