New Capital, a brand of EFG Asset Management (EFGAM), is considering domiciling its products in Hong Kong long term in order to capitalise on the opportunities arising from the Mainland and Hong Kong Mutual Recognition of Funds (MRF) scheme.
Andrew Lee, chief executive officer at EFGAM (HK), tells Asia Asset Management that he applauds the way in which the MRF scheme can help transform Hong Kong’s asset management industry from being a sales and service platform to becoming a major fund domicile.
According to him: “The repositioning will definitely benefit Hong Kong-based asset managers in terms of accessing the capital market in China. From the firm’s perspective, we’re studying the possibility of participating in the scheme as it is one of the key components in the firm’s long-term China strategy.”
Since the launch of the MRF scheme on July 1, a handful of Hong Kong-based asset managers, including Hang Seng Investment Management, Schroder Investment Management (Hong Kong), and BOCHK Asset Management, have filed applications with the China Securities Regulatory Commission (CSRC) for their products to become the first batch of northbound funds.
Mr. Lee claims the company will closely monitor the market response to decide its next step.
New Capital has already established a foothold in Hong Kong. Four of its UCITS funds – the New Capital China Equity Fund, the New Capital US Growth Fund, the New Capital Asia Pacific Equity Fund and the New Capital Wealthy Nations Bond Fund – were recently authorised by Hong Kong’s Securities & Futures Commission (SFC).
Mr. Lee believes that New Capital’s products differ from their peers due to their contrarian investment concepts: “We don’t have the herd mentality when it comes to launching new products or making investments,” he says.
“New Capital currently has ten UCITS funds. The four newly-registered funds have stellar track records and asset sizes. We’re looking to introduce non-Asia related products to the region going forward as local investors have developed less of home-bias and are looking at funds investing out of the region,” Mr. Lee adds.
In terms of its expansion strategy in Asia, Mr. Lee says the firm will look closely at the markets with low distribution costs. “China is certainly a market we are considering in view of its fast-growing and cost-effective online fund trading platforms. Singapore is also on our radar,” he reports.
EFGAM had around US$12 billion in AUM as of the end of June this year, up from $3 billion in 2009.
