Income Partners plans RMB funds after buildout

The Hong Kong fixed income house is mulling renminbi debt products and further hires, having become the third foreign firm to receive an RQFII licence.
Income Partners plans RMB funds after buildout

After becoming the third foreign firm to win a renminbi qualified foreign institutional investor (RQFII) licence, Income Partners is planning an array of RMB-denominated debt products.

The Hong Kong-based bond house has not yet determined what types of funds it will launch – this depends on how much quota they receive, says Shen Tan, head of relationship management. What is certain is that they will be actively managed fixed-income strategies, he tells AsianInvestor.

The firm is waiting to see how much it will receive in terms of quota from China’s State Administration of Foreign Exchange.

HSBC Global Asset Management and Hang Seng Investment Management were the first two non-Chinese-owned firms to win RQFII licences in July and June, respectively.

Income Partners, whose AUM grew to $1.4 billion as of June 30 from $1 billion at the end of December, is seeking to expand its investor base having recently bulked out its relationship management team.

Tan joined on July 2 from Fidelity-owned Pyramis Global Advisors in Hong Kong, where he had been head of sales and relationship management for Asia Pacific ex-Japan since June 2010. Before that, he worked at Deutsche Bank as head of its institutional business for Greater China.

The firm also hired Agnes Fong this week to work under Tan – she was previously at Deutsche Bank as a relationship manager in its wealth management division. She has also worked at asset manager Aspen Hill Partners as head of institutional sales and at BEA Union Investment Management as a global equity portfolio manager.

Six people now report to Tan, and the firm will likely add more personnel as the firm looks to add more Asian and global institutional investors and private banks to its client base, he says.

Other recent hires include Suvir Mukhi, who rejoined the firm on July 2 as a senior portfolio manager after taking a year off to focus on his family business. Prior to that, he spent 12 years with Income Partners.

The receipt of RQFII licences by larger firms HSBC Global AM and Hang Seng IM came as little surprise, says Shanghai-based consultancy Z-Ben Advisors, but Income Partners’ inclusion was more unexpected.

“The likes of HSBC and Hang Seng were, for all intents and purposes, shoo-ins for early RQFII licence and quota awards, but noone would have guessed that Income Partners, a firm with relatively small AUM [$1.4 billion], and a limited reputation globally would have been the third foreign recipient,” Z-Ben analysts say.

“The manager will soon find itself in a highly unique position, as a specialist manager in a segment that’s proven extremely popular and one [that] now has access to one of the most restricted programmes for investments in the world.”  

Income Partners’ RQFII quota also cements Hong Kong as a central hub for these types of expansions, Z-Ben says, saying that other foreign recipients will likely include PineBridge Investments and Value Partners.

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