The Hong Kong arm of Shanghai's HFT Investment Management has aggressive plans for Greater China as it aims to roll out more products and expand its advisory business.
The firm received a qualified foreign institutional investor (QFII) licence in May, allowing it to apply for QFII quota and ultimately manage QFII funds. HFT IM is a joint-venture between BNP Paribas Investment Partners and mainland firm Haitong Securities.
HFT aims to roll out a number of RMB-denominated open-ended mutual funds invested in mainland assets once it receives QFII quota, says Jelle Vervoorn, who was promoted to CEO of HFT’s Hong Kong subsidiary in April.
The strategies will be run by the six-strong investment team in Hong Kong with support from research staffers in Shanghai, and will most likely be domiciled offshore. They will represent the first QFII investment products for HFT, which until now has solely offered advisory services on QFII products.
As the firm has not yet received the quota, Vervoorn said he could not offer a timeline on when the funds will launch.
In addition, HFT received a second round of renminbi-QFII quota of Rmb800 million ($130 million) in May, in what was a record month of renminbi issuance, with Rmb15.6 billion handed out by China’s State Administration of Foreign Exchange.
The firm plans to put the quota towards a series of new RQFII fixed income products for retail investors, all of which will be managed in Hong Kong.
This follows rising interest off the back of the launch of its first RQFII fixed income fund last year, which it launched after being handed Rmb1.1 billion in December 2011 as one of the first RQFII quota recipients.
“If you look at investor appetite, it is very much on the [fixed] income side, while interest in equities is low,” Vervoorn says.
Further down the line, he expects to expand the firm’s advisory business, noting an interest in Taiwanese financial institutions in particular.
The firm is not considering adding more staff at the moment, noting that it has a “stable group in Hong Kong on both the equity and the fixed income side”.