BNP Paribas Investment Partners will set up a wholly owned foreign entity (WFOE) in China late this year, a relatively newly available route for accessing mainland clients.
The French fund house was also yesterday granted a rennminbi qualified foreign institutional investor licence in Paris, having applied in July, a month after the scheme was extended to the city, as reported. It is one of the first firms to receive one.
BNPP IP is also awaiting RQFII approval in Hong Kong, having applied in March, but it has not sought one in London. It already had received $500 million in QFII quota.
The manager has also been granted a business licence to operate a 100%-owned company in China under the WFOE scheme, said Tino Moorrees, BNPP IP’s new Hong Kong chief executive. He took up the role in September after stints running the Japan and before that the Indonesia businesses.
Other firms, such as Value Partners, have made moves to set up WFOEs, as the traditional route into China – establishing a joint venture with a local partner – looks to be increasingly falling out of favour. Both BNY Mellon and State Street Global Advisors are seen to be exiting their JVs this year.
BNPP IP’s new business will launch at the end of this year in Shanghai. It is looking at internal and external candidates to head the company, Moorrees told AsianInvestor, but he declined to discuss its likely size and planned strategies.
Moorrees said the company will focus primarily on institutional clients and private funds, and will also speak to large family offices if opportunities arise.
BNPP IP also plans to launch a multi-asset income fund focused on Europe for the wealth management sector in Hong Kong, pending regulatory approval, having rolled it out in Singapore last month.
“Given that the European economy is on a recovery path and we are a European asset manager, we have come up with a solution for Asian clients seeking multi-asset income with a European twist,” noted Moorrees.
As for the RQFII licences it is seeking in London and Paris, BNPP IP has not decided on the quota size it will apply for, and it is too early to comment on the funds it will launch using the quota, said Moorrees.
WFOE is a limited liability company wholly owned by a foreign investor. Unlike joint ventures in China, it has the independence and freedom to run its own strategies and can convert renminbi profits to dollars for remittance to its parent company outside of the mainland.
Under the WFOE scheme, BNPP IP is not allowed to sell investment products in China but can introduce its capabilities to Chinese investors who can access overseas markets or products.