The Hong Kong arm of Chinese asset manager E Fund is targeting product expansion into the European market and is planning to launch the first of several Ucits funds this month, AsianInvestor has learned.
Moreover, E Fund is aiming to set up an office in Europe, most likely in London, as part of this expansion drive, although it has not yet set a timeframe for this.
Jessie Lam, executive director for products and solutions and head of European business, told AsianInvestor E Fund has already seen interest from investors for its first Ucits product, an RMB bond fund, which is registered in Luxembourg and pending final regulatory approval.
“We hope to receive the go-ahead before the Christmas holiday because our investors are keen to make their allocations,” said Lam. Interested investors are primarily institutional investors, although the fund also has retail share classes.
Lam said the fund would invest in sovereign and corporate fixed income securities, adopting an unconstrained strategy, with no restriction on sector or type of issuer, although the initial focus will primarily be high-quality bonds such as government and quasi-government issues.
The product will be launched in partnership with London-based emerging markets specialist Collabrium Advisors, which has offices in Hong Kong and Chongqing.
Investors will be targeted across Europe, with an initial focus on the UK, Italy, Switzerland and the Nordic region. E Fund is looking to engage with family offices, funds of funds and pension funds.
Lam says the group plans to launch several more Ucits funds in Europe next year: “We are working on a couple of strategies with clients related to fixed income, as well as a high-yield fund investing in a mix of equities and bonds.”
Speaking at the Luxembourg funds association (Alfi ) conference in Hong Kong last week, Lam gave her recommendations on how to navigate fund distribution in Europe, as more Asian players look to raise assets in the region.
She said E Fund’s strategy was to focus on certain European markets: “While we can passport our funds to many markets in Europe, this would add cost to the business. The key is to know your proposition and which markets would be receptive to it, and so focus on those markets.”
Other Chinese asset managers readying product for the European investor market include China Universal and GF Asset Management . Meanwhile Harvest has set up a London base for its European expansion, as reported.