Pickerell quits JF

The China hand is setting up his own shop.

Blair Pickerell has left JF Asset Management to establish his own Hong Kong-based company that will continue his work of developing China s mutual fund industry. He has several financial backers whom he declined to name but characterized as Hong Kong-based independent parties, all of whom are keen to build a fund management business in China.

He left JF on December 14th amid an organization reshuffle and started operations at his new company, Capital Holdings, on the 16th. Capital Holdings seeks to invest in operating companies on the mainland, with an emphasis on the domestic mutual fund business.

Pickerell says he has already made one offer. Under Chinese law, Capital Holdings can try to buy into an existing fund management company or establish a new one with a securities or investment trust company. This can be done in several ways, including establishing an onshore company or by acquiring an offshore vehicle.

Pickerell sees a lot of opportunities now that recent laws limiting any organization from owning more than two fund companies have created a wave of M&A activity as mainland groups divest.

"It's easy to raise money, we already have solid support," Pickerell says. "The next challenge is management, but [JF] has run these systems in Chinese in Taiwan and Hong Kong, so we know how to do that. The only real issue that confronts me is getting the licence."

Pickerell declined to discuss why he left JF, where he had spearheaded its drive into China. Under him, JF was the first foreign fund manager to sign a technical cooperative agreement, with Shanghai s Huaan Fund Management. That work helped Huaan launch China's first open-ended mutual fund.

JF and Huaan were also the first to announce their intention to form a joint venture when the laws allowed. The deal has failed to materialize, however, leading to speculation among other industry executives that JF s owners, JPMorgan Fleming Asset Management, has gotten cold feet.

Chase Manhattan Bank bought Jardine Fleming (and then JPMorgan) after the firm established a relationship with Huaan. Several people have rotated at the top positions since then. American firms in general have shied from commitments in China s mutual fund industry, which is long on trust and relationships and short on contracts. Pickerell is believed to have left so he could continue his work without internal restraints.

He joined Jardine Matheson in 1984 after receiving his MBA from Harvard, and the next year was sent to establish Jardine Fleming's Taiwan office. JF pioneered the mutual fund in Taiwan under Pickerell s leadership, and today it maintains a dominant position in that market. He served for two years as business developer at the Mandarin Oriental in Hong Kong, then returned to run Jardine Pacific and in 1999 returned to JF Asset Management, shortly before its acquisition by Chase.

Meanwhile at JF, Blair's responsibilities have been divided between Gerry Ng and Doug Eu. Ng, who runs the pooled pension business, now reports to Pickerell's former boss, London-based Mark White, who is global head of institutional sales and marketing for JPMorgan Fleming Asset Management. Eu is taking over the pooled funds side as CEO of JF Funds. Both Ng and Eu report to Clive Brown, CEO of JF Asset Management for Asia ex-Japan, but this will soon change, as Brown is being promoted to become CEO of all of JPMorgan Fleming Asset Management and will quickly depart for London.

Taking over for Brown will be David Hsu, currently country manager for Taiwan, a position he will retain as well as become JF's Asia head.