Shenzhen-based Bosera Asset Management is setting up an office in Hong Kong and awaiting regulatory licensing from the territory's Securities and Futures Commission to launch a retail funds business.
This is the next step in the internationalisation of Bosera's business, which is among China's 'old 10' batch of pioneering mutual-fund companies, dating from 1998. Today its total assets under management are around $28 billion, most of which comes from mainland corporate pensions and Social Security Fund segregated accounts.
"We are preparing to develop both our QFII and QDII businesses over the next three years," says Keith Li, managing director and head of the Hong Kong business, referring to China's regimes for inbound and outbound capital investments, respectively.
The Hong Kong office will set up a platform for cross-border asset management, build its investment capabilities and develop client servicing that meets international standards. The firm intends to create products that build on its Greater China investment expertise, but it will consider partnerships with third parties for additional strategies.
Some of the firm's existing portfolio managers will relocate from Shenzhen to Hong Kong. Several of them have worked in overseas centres such as New York and London and have experience managing international portfolios.
A further challenge to creating an international business, says Li, is to educate mainland clients about what to expect from global markets, and prove the efficacy of running fundamentally based, longer-term strategies than is usually found inside China.
Bosera is not alone among mainland fund houses in its expansion into Hong Kong. Harvest Fund Management, for instance, already has an office there and has also been talking up its prospects for establishing an international business.