Invesco’s focus for its new private fund business in China will be to offer products to institutions that invest in mainland assets, a spokesman told AsianInvestor on Friday, after the US fund house and Hong Kong rival Value Partners unveiled freshly acquired private fund management (PFM) licences.
This came as the Chinese market opened further last week. On Friday Beijing announced the removal of foreign-ownership limits on mainland banks and the raising of the cap on foreign ownership stakes in asset managers, insurers and securities companies to 51% from 49%. These developments came in the wake of US president Donald Trump’s China visit.
Invesco and Value Partners follow the likes of foreign peers Fidelity, UBS Asset Management, Fullerton and Man Group in winning approval to manage and sell funds onshore to institutional and wealthy investors.
The Shanghai wholly foreign-owned enterprises (WFOEs) of Invesco and Value Partners received the PFM licences on November 9 and must roll out their first products within six months of that date.
The Invesco spokesman said: “Our focus is on investments domestically, not on global products. That’s not to preclude doing something like that in the future but the near-term plan is for investing into the domestic market.” He declined to provide details of the asset class of the first fund or a likely date for the launch.
Invesco’s China office head is Andrew Lo, and the investment team in the Shanghai WFOE is an extension of the Greater China equities team, overseen by Mike Shiao, Hong Kong-based chief investment officer for Asia ex-Japan.
Value Partners declined to comment on when it will roll out the first product and which type of investment funds it is preparing.
The firm has been adding to its China team this year and now has 20-plus staff dedicated to its mainland business, which is headed by Yu Xiaobo, who was appointed to the role in July, as first reported by AsianInvestor.
The AUM of Value Partners’ China business is around $600 million, Yu said in late July. The firm has two WFOEs in Shanghai—one to tap the onshore market under the PFM licence, and the other to enable Chinese investors to invest overseas under the qualified domestic limited partnership (QDLP) scheme.
Fullerton Fund Management and Man Group were granted PFM licences in September, and UBS AM preceded them in July. Fidelity received the first such licence in January and launched an onshore bond fund in May.
A spokeswoman for UBS AM told AsianInvestor that the Swiss firm aimed to launch its first private fund by the end of the year. Products in the pipeline include ones investing in China equities, fixed income and multi-asset, she added.
Fullerton and Man Group have not filed a product yet, according to the Asset Management Association of China. Fullerton is looking to launch an equity fund and Man working on a quant strategy.
Invesco was fourth in this year’s annual ranking of foreign asset managers by the strength of their China businesses, published in April by Shanghai-based consultancy Z-Ben Advisors. That was the same as its position last year, while Value Partners slipped to 17th from 13th. JP Morgan AM and UBS AM ranked first and second, respectively.