After searching high and low in a long year, Shanghai-based China Universal Asset Management has finally nailed two senior hires for its proposed Hong Kong office. The office is expected to be ready for business by February.
Sources say Sheldon Gao, the well-respected China chief executive of Schroders' office in Shanghai, and Doris Wong, currently a Hong Kong-based investment director at Standard Life Investments, will join China Universal's new team. Gao will head up the Hong Kong office as CEO, reporting to Andy Lin, CEO in Shanghai, while Wong will exit a short stint in institutional sales and return to more familiar turf in retail sales.
Gao has helped put Schroders on the map for qualified domestic institutional investor (QDII) and institutional sales. He has also helped the firm deliver qualified foreign institutional investor (QFII) products and promoted its A-share strategies to overseas clients. Prior to Schroders, Gao has had a long track record in research and strategy development. He has worked for AllianceBerstein, Morningstar and Dow Jones Indexes. His role at Schroders will be assumed by Wu Hui on an interim basis, until the firm finds a permanent replacement.
Meanwhile, Wong will formally move to China Universal in late February. With Wong's exit, Standard Life Investments (SLI) will be one person short of its required number of responsible officers. The Hong Kong office has been getting around the Securities and Futures Commission's licensing requirement by flying in listed responsible officers. James Cooper (SLI's Australia head) and Ross Teverson (a portfolio manager who was relocated to Edinburgh after the shut-down of SLI's regional investment function) have been regularly coming to Hong Kong for the required number of hours.
James Aird, Edinburgh-based head of strategic development, who has also filled the role of regional head of Asia since CEO Mike Reed's ousting, says SLI will be sending in reinforcements for salespeople and that SLI is committed to the institutional business in Asia. (The Scottish group -- with some $200 billion in AUM -- has been hiring since March and sources roughly $200 million from the region.)
China Universal's Lin could not be reached for comment as of press time. But insiders say the firm is now in the final stage of the SFC approval process for a licence to operate in Hong Kong. They expect the approval will take place by February.
The Hong Kong office will provide a support role to the firm's overseas business development and investment activities driven by China Universal's Shanghai head office.
In previous interviews with AsianInvestor, Lin has said he expects the Hong Kong team to help drive QFII advisory business. Lin has a view that the majority of global investors are under-invested in China A-shares. He wants the team to reach out to institutional investors in the US, Europe and Asia and promote the idea that the weight allocated by most global indices to China A-shares under-represents China's economic ascent, given the portion of global GDP the country contributes.
China Universal has also newly received a $1 billion forex quota from China's State Administration of Foreign Exchange for overseas investments as a qualified domestic institutional investor. Advised by US firm Capital International, the fund will have a much stronger tilt on Asia-Pacific equities compared with previously launched QDII funds. The fund is expected to launch early next year.
China Universal started out as an investment arm managing excess treasury reserves at China Eastern Airlines. It was officially approved to start business as a fund management house by the China Securities Regulatory Commission in 2005.
Under the leadership of Lin and chief investment officer Herbert Zhang (regarded as one of China's best bear managers), in just a short few years, the firm has grown to become the 12th largest fund house in China. Its AUM totalled Rmb56.1 billion ($8.23 billion) as of the end of September, according to Z-Ben Advisors.