iFast eyes IPO, Greater China buildout

The online funds firm is understood to have applied to list on the Singapore Exchange. It is also seeking to tap deregulation in Taiwan and retail appetite for online funds in China.
iFast eyes IPO, Greater China buildout

Online funds firm iFast Financial is understood to have applied to the Singapore Exchange for an initial public offering (IPO), AsianInvestor can reveal.

Market sources have said that the firm plans to list by the end of this year, although its chief operating officer in Hong Kong, Kelvin Yip, declined to comment on market speculation.

The iFast platform provides an array of funds from different providers, like a fund supermarket. Its business-to-business (B2B) clients are banks, asset managers, insurers and financial advisory firms.

Yip said iFast had plans to expand vastly the number of funds on its platform, from 700 in Hong Kong up to 10,000, although he did not put a timeframe on this. The thinking is that as iFast gets more B2B clients, it will add more options. But Yip declined to reveal assets under administration.

What Yip did say was that iFast is moving to build its B2B offering in Greater China. It sees deregulation in Taiwan and appetite for offshore funds and the runaway sales growth of online products in mainland China as key drivers for future growth.

He noted that the firm is in talks with Taiwanese banks, including Cathay Financial and Chang Hwa Bank, about providing a platform for offshore products.

“We just started talking to Taiwanese banks about two months ago and they seemed interested,” he told AsianInvestor. “We hope to on-board them in the next six months.”

This January, Taiwan’s Financial Supervisory Commission (FSC) expanded the scope of financial products available via offshore banking units (OBUs), which were set up in 1983 to serve non-Taiwanese residents and companies registered offshore.

Typically they have been used for deposits, loans and foreign currency business. Until this year, OBU users could only buy products authorised for sale onshore, which meant limited choice. But deregulation has expanded that universe to include alternative products and China RMB funds.

This has paved the way for domestic Taiwanese banks to eye offshore platforms. Yip also explained that these players had been slow to adopt online vehicles as potential fund delivery channels, but were improving.

He is anticipating widespread interest from OBU users in renminbi-denominated products, such as dim-sum bonds and RMB qualified foreign institutional investor (RQFII) funds.

In addition, Yip said iFast was in discussions with mainland onshore fund companies with qualified domestic institutional investor (QDII) clients, as well as mainland managers planning to jump on the online distribution bandwagon. It is talking to managers about white-labelling for online fund portals.

According to Asia distribution statistics from financial services research firm Cerulli Associates, the market share of IFAs and online channels increased 3.6 percentage points year-on-year to 11.6% in 2013. That growth was largely driven by the adoption of online channels in China.

Yu’E Bao, an e-commerce platform from Alipay, an affiliate of Alibaba, launched a money-market fund from Tianhong Asset Management in June last year that catapulted the firm from 52nd largest fund manager in China to the largest within six months.

Yip is optimistic that iFast can tap into growing retail appetite for buying funds online in China.

The firm started out in 2000 with the online business-to-consumer funds platform in Singapore. It has since expanded the platform to Hong Kong and Malaysia, as well as launched online B2B operational and settlement services.

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