China’s GF eyes asset owners from new London base

GF Fund Management is the second Chinese fund house to receive regulatory approval for an office in London as mainland managers begin to realise their overseas ambitions.
China’s GF eyes asset owners from new London base

Guangzhou-based GF Fund Management has become only the second Chinese fund firm to have a fully operational office out of London after its licence application was approved, AsianInvestor can confirm.

GF International Asset Management (UK) was authorised by the UK’s Financial Conduct Authority (FCA) this month, as hinted earlier, shortly after Beijing staged the seventh UK-China Economic and Financial Dialogue in late September. That economic co-operation dialogue includes London becoming a global hub for RMB business.

A raft of Chinese managers have been contemplating expanding their footprints to Europe and the US after listing exchange-traded funds in these markets directly using renminbi-denominated qualified foreign institutional investor (RQFII) quotas, as opposed to providing sub-advisory services as they had in the past.

GF Fund Management is now able to provide regulated products and services in the UK and also Ucits products in Europe, since its licence is compliant with the European Commission’s Markets in Financial Instruments Directive. It is understood its plans include domiciling funds locally and reaching out to European asset owners.

It is following in the footsteps of Harvest Global Investments, which applied for an operational licence in September 2014 after last year’s UK-China dialogue and received approval this March, as reported.

Harvest plans to offer both mandates and Ucits funds to European investors out of London. It also aims to target institutional clients after winning a Rmb3 billion ($474 million) RQFII quota in June, as reported.

Regulatory filings on the FCA website list four licenced executives for GF International Asset Management (UK). They include director and chief executive officer Guo Congyang and vice-chairman Zhang Jinghan, according to Endole, a UK-based website featuring company directors’ information.

AsianInvestor understands that GF’s Hong Kong business was responsible for driving the firm’s London office application, which was launched late last year.

Nathan Lin, chief executive of GF International IM in Hong Kong, talked to AsianInvestor this July about the firm’s plans to set up an office in London, as reported.

He pointed out that the approach to product offerings and business expansion was different for London and New York, with the former seen as the home of global emerging market investors and the latter as a base for ETF growth.

In April this year, Guangzhou-based E Fund Management, which oversees more than $100 billion in assets including segregated accounts, opened an office in New York and said it was planning to expand into Europe in the near future.

The following month Hong Kong-based CSOP Asset Management said it was considering opening an office in New York.

Other Chinese managers such as China Universal and Fullgoal have chosen to set up Luxembourg-based Sicav fund platforms, saying they consider setting up physical offices overseas as a longer-term goal.

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