UK-based Man Group and Singapore’s Fullerton Fund Management (Fullerton), a subsidiary of state investment firm Temasek Holdings, are set to launch their first onshore private fund products in China after securing private fund management (PFM) licences.
Their respective wholly foreign-owned enterprises (WFOEs) – Man Investment Management (Shanghai) and Fullerton Investment Management (Shanghai) – received the licences from the Asset Management Association of China (AMAC), they said in separate statements on September 8. AMAC is a self-regulatory body that represents China’s mutual fund industry.
Fullerton’s WFOE is in discussions to introduce an equity fund by March 2018, a company official tells Asia Asset Management (AAM).
“We’re working to launch an equity fund within the next six months,” Mark Li, general manager and head of China sales at Fullerton’s WFOE, says in an interview with AAM.
“We’re in advanced discussions with a local distributor. We’re still in the midst of discussing and planning for other products we propose to launch over the longer term,” he adds.
According to Mr Li, Fullerton aims to offer diversified products that meet clients’ requirements.
He acknowledged that the WFOE market is competitive, but says Fullerton has a “credible offer” for Chinese investors, and aims to build a strong brand in the Mainland.
Fullerton’s WFOE has expanded its China team to 11, from six when it was set up last year. It first opened a representative office in the Mainland in 2007.
Meanwhile, Man Group Chief Executive Officer Luke Ellis says the PFM licence sets the stage for the company’s long-term strategy to build its presence in the world’s second largest economy.
“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 licence,” Mr. Ellis says in the statement.
Man Group opened a China representative office in 2012, and received a qualified domestic limited partnership (QDLP) licence from the China Securities Regulatory Commission the following year, allowing it to raise funds from qualified Chinese investors for investments overseas. Fullerton does not have this licence.
Man Group set up its WFOE last year. A spokeswoman from the firm declined to provide AAM with details of the schedule for the launch of its China’s onshore private fund products.
Beijing first granted WFOE status to a batch of foreign asset managers in 2015, including Franklin Templeton Investments and Fidelity International. A WFOE designation allows foreign companies to operate asset management and investment consulting businesses in China.
In January, AMAC awarded PFM licences to a handful of WFOEs, including the local unit of Fidelity International, allowing them to operate onshore private fund businesses in China.
