US fund house JP Morgan Asset Management promoted Henry Tong to head its China retail business on January 1, leaving a vacancy for a Hong Kong head of private bank distribution, AsianInvestor has learned.
Tong replaced Richard Mo, but AsianInvestor could not ascertain by press time when Mo left or where he had gone.
Eddy Wong, head of funds business for Hong Kong and China, said JPM AM was looking to fill Tong's previous position but hadn’t decided whether it would look externally.
In any case, the firm is in no rush to expand headcount at present. Wong said 2016 looked set to be a volatile year, with US interest rates set to continue rising for the first time since 2008 and uncertainty rife in the market.
“I will take a more prudent approach and observe the business landscape and sales results before making a call on hiring,” he added.
JPM AM has seven salespeople focused on its China retail business, now headed by Tong and all based in Hong Kong, as it doesn’t have an office on the mainland. Tong reports to Wong and has been with the firm since mid-2012, having joined from Swiss bank Syz & Co and before that UK hedge fund group Man Investments, according to his LinkedIn profile.
Wong said the firm had no immediate plans to open an office in China but will focus on working with its joint-venture partner China International Fund Management (CIFM) for the Hong Kong-China mutual recognition of funds (MRF) business. It has just made its first foray into onshore China retail funds market through the MRF, having launched an Asian total-return bond fund in China on Monday.
Asked about the level of demand for the product, he said: “I don’t think there will be large inflow into our fund in the first three months, but we are ready and patient enough.”
JPM AM has embarked on a roadshow in China to promote the fund, which is being distributed by nine banks in China, including Bank of East Asia, Citi, Standard Chartered and HSBC.
Wong said JPM AM hoped to start using online sales channels on the mainland this year, but that it would not do so for the first MRF fund. The firm intends to distribute more funds in China, subject to regulatory approval.
“There are some processes within our firm that we need to clear first before reaching out to online platforms,” said Wong, declining to elaborate.
The obstacles around electronic distribution tend to stem from know-your-customer requirements, he noted. Fund managers have to make sure investors understand the products and their risks, said Wong, and salespeople from banks can communicate this to investors better face to face than through online channels.