Hong Kong-based Harvest Global Investments is setting out to establish an office in London early next year, its product and client services head, Jeff Lim, has said.
The HK subsidiary of Beijing-headquartered Harvest Fund Management plans to use the overseas base as a gateway into Europe. It is seeking to build a fully functional asset management arm there, including investment team of up to 10 staff.
It will be populated mainly by local hires, although transfers from both Hong Kong and mainland China are a possibility.
As a separate legal entity it will be required to apply for its own renminbi-denominated qualified foreign institutional investor (RQFII) licence and quota to achieve its goal of launching RMB products to European investors.
“We will seek to replicate our existing Hong Kong office structure, albeit on a smaller scale initially,” said Lim, who is leading the development of the London office.
Harvest Global Investments established its Hong Kong office in 2008, since when it has built up a 50-strong team in the city. The firm had received a total RQFII quota of Rmb14.3 billion ($2.3 billion) by the end of this August.
Lim noted that Harvest was preparing to apply for a licence from UK regulator the Financial Conduct Authority (FCA).
The firm’s initial focus will be to offer European investors onshore Chinese exposure. It plans to offer a range of RMB funds, and will eventually extend that to broader Asian strategies.
“On a global basis, China is an attractive market over the long term,” Lim said, with Beijing having moved to quicken its pace of market liberalisation and internationalisation.
Lim suggested its London plan was a natural progression for Harvest’s global development. Expansion to other international centres would depend on business cases, he added.
Harvest Global Investments' decision to apply to set up a London office was announced during Chinese vice-premier Ma Kai’s visit to the English capital last week.
London is striving to establish itself as a global RMB hub. It received an RQFII quota of Rmb80 billion ($13 billion) last October.
London-based fund house Ashmore received Rmb3 billion in RQFII quota this February, while BlackRock Advisors (UK) and HSBC Global Asset Management (UK) were granted RQFII quota of Rmb2.1 billion and Rmb3 billion in August, respectively.
Asset management companies in Paris have also been granted RQFII licenses recently. BNP Paribas Investment Partners (BNPP IP) and Carmignac were awarded RQFII licenses, with the former working its way through a quota application.