The Hong Kong arm of Chinese asset manager Fullgoal is planning to set up a range of Luxembourg Sicav funds, joining a growing list of its peers seeking to tap European demand for China exposure.
The exact details are still under wraps but the first fund in the range will be a fixed income product, to be launched by the end of the year, subject to regulatory approval.
Other mainland managers are making similar moves. China Universal has said it plans to launch its first Ucits bond product in Europe this month, as reported.
The decision to set up a Luxembourg platform is part of Fullgoal's plan to extend its qualified foreign institutional investor (QFII) and renminbi QFII business outside Asia.
Michael Chow, head of international business at Fullgoal Asset Management (HK), told AsianInvestor: “As we have grown, Europe is an area we are looking closely at, so the development of a Luxembourg Ucits platform is a part of that."
This will be the company’s first foray outside Asia, and Chow said it was an “all new set-up”. Fullgoal will not be establishing a European base at this stage and it currently has no-one on the ground there.
Distribution strategy has not yet been decided. Chow said Fullgoal was considering options, one of which would be to use Bank of Montreal – one of the fund firm's major shareholders – as a private bank channel. But the Canadian firm has a limited presence in Europe, so Fullgoal will need other retail and private bank distributors.
"We are also in discussion with some external business partners," he added.
In terms of service providers in Europe, Fullgoal will have plenty of options. In Asia, the firm already uses Deutsche Bank as its custodian and fund services provider for RQFII accounts. Deutsche provides Fullgoal with master custody, fund administration and transfer agency services in Hong Kong, as well as sub-custody and reporting services in mainland China for its RQFII funds.
The Fullgoal group, including the parent company on the mainland, has $43 billion in assets under management. According to Galaxy Securities, it was the number five ranked fund house in China at the end of 2014.