Fosun Group’s head of fixed income investment quit the Chinese conglomerate on Friday and plans to set up a private fund manager in Hong Kong in January, AsianInvestor can reveal.
Han Tongli’s new venture will run a global and Asia macro strategy mostly invested in bonds, in addition to foreign exchange, stock futures and other derivatives, said sources familiar with the matter. It will not use extensive leverage.
Han – whose title at Fosun was chief investment officer of fixed income, currencies and commodities (FICC) – is understood to have raised $500 million of seed money in offshore dollar assets from Chinese companies in Hong Kong and a US pension fund.
The start-up is pending regulatory approval from the Securities and Futures Commission and expects to receive its licence in early 2017, said sources.
Han had joined Fosun in October 2014, and the FICC department he led reported directly to Fosun Group’s board. Though the FICC department managed the company’s insurance assets, it was independent from Fosun Insurance Group.
With Han’s departure, the FICC team is being incorporated into Fosun Insurance Group. The group has appointed a new Hong Kong-based head to oversee FICC investments, effective this week, but Fosun said it could not name the new head due to company policy.
“Han’s resignation will not affect the group’s business operations,” a Fosun spokesperson told AsianInvestor. The firm declined to comment on why the FICC department was being incorporated into Fosun Insurance Group.
Before joining the group, Han was head of fixed income in the asset management division of Bank of Communication International in Hong Kong from April 2012 to October 2014. He has also worked in the US as an emerging markets portfolio manager at Pimco from January 2008 to February 2011.
Han joins a growing list of Chinese veterans with global investment experience setting up fund firms in Hong Kong in recent years.
One example is Charles Wang, who set up Academia Capital Management in Shenzhen in 2014, having worked at Putnam Investments and Acadian Asset Management, both based in Boston. Academia plans to launch an A- and H-share quant fund before the end of the year, targeting initial AUM of $100 million.
Eyeing new mandates
Meanwhile, Fosun's insurance businesses are looking to diversify their portfolios and boost returns. The group owns six insurers* across China, Hong Kong, Europe and the US, which between them hold Rmb164.6 billion ($24.7 billion) in investable assets. Of that, 74.1% was in fixed income as of June 30, up from 67.5% at the end of 2015.
Fosun is likely to issue more international bond mandates on behalf of its insurance businesses, said vice chairman and chief executive Liang Xinjun last month.
It is also considering buying $5 billion to $10 billion of ‘run-off’ insurance assets in Europe over the next 12 months, as part of its plan to diversify the sources for insurance assets, he told AsianInvestor.
Run-offs are outstanding policy portfolios from insurance companies that are still paying out to existing policyholders but not accepting new ones.
Fosun had sought the run-off opportunities for more than a year and has signed agreements with some insurers in Europe, pending regulatory approval. It is also looking at such opportunities in Asia, especially Japan, and the US.
* Fosun’s six insurers are Fosun Insurance Portugal, Ironshore, Meadowbrook, Peak Reinsurance, Pramerica-Fosun Life Insurance and Yong’an P&C Insurance.