JP Morgan’s former China investment banking chairman has joined Shenzhen-based First Seafront Fund Management to lead the three-year-old firm’s international expansion.
Frank Gong has been named as honorary chairman and will act as the company's core partner. He will initially be based in Shenzhen, but is likely to move to Hong Kong once First Seafront gets the greenlight to establish a unit in the latter city. The application is pending approval by the China Securities Regulatory Commission.
Gong was appointed as the firm’s principal consultant last year but officially started in his current role on March 28 this year.
Speculation about the move first appeared in local state-owned media Securities Times last November. Given Gong’s experience of Chinese capital markets and international finance, he is seen to be supporting First Seafront's ambitions for foreign expansion, as overseas investors increasingly eye mainland assets.
The firm was among the first to register a company in Qianhai, China’s test-bed for renminbi internalisation and financial reforms, in January 2013. It is co-headed by two chairmen: Wang Zhaohua, former general manager at Kaiyuan Securities, and Wang Hongyuan, formerly proprietary trading head at Citic Securities and chief investment officer at fund house China Southern.
First Seafront has deployed what is known as a “business units” structure for its management and investment team. Such units are based on private fund houses’ partnership structures, with the aim of retaining talent. They provide more autonomy in terms of operation and investment than traditional fund houses, as well as a share of management fees, as reported.
First Seafront had Rmb22.4 billion ($3.5 billion) in mutual fund assets as of end-2015 across 15 balanced funds, four equity funds, eight index funds, one bond fund and one money-market fund, according to Galaxy Securities.
Gong stepped down as JP Morgan’s China investment banking chairman in January 2015, having been promoted in March 2014 from vice-chairman, a role he held for five years. He made his name while serving as the bank’s China economist and head of equity research from 2004 to 2009, having predicted the Beijing’s Rmb4 trillion stimulus plan during the global financial crisis in 2008.