London-based F&C Investments plans to submit an application to the China Securities Regulatory Commission and the State Administration of Foreign Exchange to become a qualified foreign institutional investor.
The application is part of a growth strategy in Asia, which may include moving or hiring investment professionals to be based in Hong Kong, says Cristóbal Méndez de Vigo, head of global distribution and business development.
The firm, founded in 1868 and manager of Britain’s first unit trust, has been investing in Asian equity markets since the 19th century. Today it manages around $3 billion of Asian securities (its global AUM is around $150 billion).
Only in the past two years, however, has F&C begun to build a profile in the region and market itself to Asia-based clients.
“The theme among both our Asian and European clients is accessing China’s domestic market, and our QFII application will form the basis of our Asian strategy,” says Méndez de Vigo.
In addition to F&C’s own long-only equity and bond strategies, the firm has moved into the real-estate investment space with a recent acquisition of Reit (now called F&C Reit). That unit, which already has European and Indian private-equity assets, is now looking to do more deals in East Asian and other emerging markets.
The firm has also just closed on its acquisition of Thames River Capital, an absolute-return umbrella of boutique managers focused on the high-net-worth market. Thames River is already being distributed in Asia via Peak Capital, an alternative-investments platform.
Finally, F&C has a joint-venture pending regulatory approval with China’s Huaxia Bank.
Méndez de Vigo has experience in Chinese fund JVs. He previously worked at Allianz Global Investors, in Hong Kong and Australia, and was involved in Allianz’s signing of a JV with Guotai Junan Securities in Shanghai.
F&C intends to keep a fairly hands-off approach to the Huaxia Bank JV, with an initial stake of only 15%. It will advise the JV on how to get established, on training, and on building good processes, but it won’t be involved in management. F&C will also be a potential adviser or provider should the JV win a QDII licence.
F&C has already registered products in Hong Kong, where it is sticking to niche, thematic plays (all long-only) instead of trying to be a mainstream provider. It has a global convertible bond fund and a climate-change thematic strategy registered, and will register a global emerging-markets debt product next.
The Hong Kong office is now run by Amy Chau, who joined earlier this year as head of regional business development from Standard Chartered’s wealth management business.