Industry insiders have denied media reports that Chinese firms CSOP Asset Management and E Fund are close to setting up shop in London.

CSOP Asset Management, E Fund and Haitong Securities are reportedly preparing to put a presence in London. According to a Financial Times story yesterday, which cited a senior figure in the UK’s asset management industry, E Fund’s arm is closest to opening.

Perhaps not all that close, however. Ko Tseng, managing director of investment for E Fund (Hong Kong), told AsianInvestor that the firm had yet to settle on a plan.

Another source familiar with E Fund said he had not heard of the plan and didn’t think one was necessary. The cost of setting up in London would be high because of rent, lawyers’ fees and local hires, he added, and it wouldn’t be worth running a sales office for Ucits funds there.

Sources close to CSOP also deny the firm has a plan to set up a subsidiary in London. “It’s too complicated to set up an asset management firm in London,” said one. He was referring to the Financial Conduct Authority approval process that an asset manager would need to pass to open an office in London.

Distance is another concern. “London is too far away from China; it is very difficult for us to inject capital and relocate our manpower and hire there,” said one executive at a mainland firm.

However, Haitong International confirms it plans to set up subsidiaries in London and New York, as it has said previously, but adds that it does not have a timetable for doing so. If it were to open a London office, the firm would likely prioritise asset management and institutional sales, says Lin Yong, chief executive and deputy chairman of Haitong International.

Chinese fund managers have been busy visiting Europe since the start of the year because they have been rolling out Ucits structured renminbi qualified institutional investor (RQFII) funds on the main bourses in the region, such as London and Frankfurt.

In January, CSOP listed its FTSE A50 RQFII ETF in London, while in May E Fund listed its MSCI China A ETF on the same bourse. They both worked with local partners to launch the products. Using a local partner provides Chinese fund managers with a cost-effective way to enter the European market.

CSOP set up a 50/50 joint-venture trust company in Ireland with Source when it launched its first Ucits RQFII ETF in London. The firm could use the existing Ireland JV to launch other Ucits products in the future, rather than setting up a new office in London, note sources.