The Hong Kong arm of mainland manager E Fund is targeting global investors with direct primary- and secondary-market deals after receiving its qualified foreign limited partner (QFLP) licence.
E Fund (HK), which has been building its alternative investment team amid a company restructure, received a QFLP permit from the Shenzhen Municipal Government Financial Services Office last week.
This allows it to convert dollars into renminbi to make both private equity and venture capital investments onshore in China.
Accredited QFLP firms enjoy a more streamlined and faster deal approval process to traditional fund houses and international players, who are required to apply for quotas in accordance with the size of their investments.
E Fund (HK) says it is targeting institutional and high-net-worth clients among whom it has seen a rising appetite for direct investment into China.
The licence approval comes after the firm reorganised its business this year to prioritise three divisions: qualified foreign institutional investor (QFII) and renminbi-denominated QFII, alternatives and overseas investment.
Its QFII/RQFII unit provides onshore access to global investors, while its alternatives team has been built to complement its funds offering and its overseas unit focuses on international secondary investments.
E Fund (HK) has assembled a four-strong alternatives team in Hong Kong managing $1.3 billion. It works together with parent company E Fund’s 30-strong onshore unit.
The team is led by managing director Yang Xiuke, who joined from Haitong International Securities this April.
Yang said the firm’s alternatives build-out was designed to meet clients’ asset allocation needs and expand its investment scope from secondary to primary markets, to include private equity, IPOs and private investment in public equity (Pipe) deals.
“The clients we target are different from mutual fund clients,” explained Yang, pointing to institutional investors and high-net-worth individuals. “We also aim to service both listed and unlisted companies in financing, mergers & acquisitions or help them to expand their business.”
AsianInvestor understands that from April to July this year E Fund (HK)’s alternatives team made PE placements in an online property insurer and Uber’s Chinese rival Didi Kuaidi. It also invested as a cornerstone in CGN Power.
E Fund manages Rmb367 billion ($57.6 billion) in mutual funds as at the end of June and ranked as China’s third largest fund house, according to the Asset Management Association of China.