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February 2024
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HSBC Securities Services named custodian of Ping An's first RAIF fund

HSBC Securities Services has been named custodian and fund administrator of Ping An of China Asset Management (Hong Kong)’s (PACAM HK) first reserved alternative investment fund (RAIF), a structure that will enable it to be distributed in Europe.

PACAM HK has launched the RAIF’s first sub-fund, the Emerging Market Income Fund, which invests in debt securities of emerging markets, including Chinese bonds which are available via Bond Connect, a cross-border scheme that allows investors in Hong Kong and China to trade in each other’s fixed income markets.

RAIF is a European fund structure based on the principle of risk-spreading, and has to be overseen by an alternative investment fund manager.

It “combines the characteristics and structuring flexibilities of Luxembourg-regulated specialised investment funds (SIFs) and investment companies in risk capital (SICARs),” HSBC Group plc, the parent of HSBC Securities Services, says in a statement on September 21.

SIF is a regulated multi-purpose investment fund aimed at institutional investors and SICAR is a regulated structure designed for private equity and venture capital investments.

According to HSBC, the RAIF structure will enable PACAM HK to have “a significantly shorter time-to-market for new fund launches” because it does not require local regulatory approval.

“We’re delighted to be partnering with Ping An as they expand beyond Asia into Europe and to be able through the expertise we have in both Asia and Europe to help them successfully launch their first RAIF,” Carol Hughes, HSBC’s head of client management for securities services, says in the statement.

The sub-fund, the Emerging Market Income Fund, first targets “institutional investors in Asia and will also be transformed into an Undertakings for the Collective Investment of Transferable Securities (UCITS) vehicle to both institutional and retail investors in Asia and Europe”, HSBC says. It did not provide other details of the fund.

A HSBC spokeswoman tells Asia Asset Management that the sub-fund was officially launched in early September.

UCITS products are governed by European Union rules and can be sold to investors there without seeking approval in individual jurisdictions.

Chi Kit Chai, head of capital markets and chief investment officer at PACAM HK, says in the statement that the new fund “could broaden investment scope for our clients’ need”.

PACAM HK, the international asset management unit of Shenzhen-based insurer Ping An Insurance, does not disclose its assets under management (AUM) figures. Its parent company Ping An Asset Management had AUM of approximately 2.8 trillion RMB (US$408.7 billion) at the end of June 2018.