Pictet Asset Management aims to launch a renminbi-denominated Chinese bond fund this quarter, after its UK branch was awarded RQFII quota of Rmb1 billion ($161 million) last month.
The Swiss firm also plans to introduce up to five Luxembourg-domiciled funds in Hong Kong this year, including bond and equity funds.
The RMB bond fund will initially be marketed in Europe targeting institutional and long-term investors, but is destined for global distribution once the fund gets more RQFII quota, said Amy Cho, Asia head of Pictet AM.
The fund house had set up a dedicated Greater China fixed income team last September. That move followed the award of a renminbi qualified foreign institutional investor (RQFII) licence in November.
The quota was awarded to the firm’s UK office, but the investment team will be based in Hong Kong.
The new fund will be managed by Cary Yeung, Pictet AM’s head of Greater China debt, who joined in Hong Kong from Taikang Asset Management last September. Yeung is supported by Jennifer Chang, senior credit analyst, and Echo Chen, specialist trader in Chinese debt. Chen arrived last September, while Chang joined the company this month.
Pictet AM expanded its Asia investment and trading headcount in September, when it relocated the Greater China long/short investment team to Hong Kong from Geneva in a bid to boost performance and help source liquidity.
Cho said the firm was an early buyer of emerging market debt products and intended to participate in Chinese onshore bond investing before Beijing fully liberalised its capital account. Pictet AM had $23 billion in EM debt as of the end of 2014, out of a total $151 billion in AUM.
Six firms in the UK had received Rmb10.9 billion in RQFII quota between them by the end of last year out of a total of Rmb80 billion that London received in October 2013. Apart from Pictet AM, Cederberg Capital won an RQFII quota of Rmb300 million last month.
By the end of 2014, the State Administration of Foreign Exchange had handed out RQFII quota worth Rmb299.7 billion to companies in Hong Kong, Singapore, UK, France and South Korea. The scheme was also expanded to Australia and Canada late last year.
RQFII licences were awarded to 10 firms last month, namely: the Singapore branches of Schroder Investment Management, Bank of Nova Scotia and JP Morgan Asset Management; Korean firms Mirae Asset Global Investments, Tong Yang Asset Management, NH-CA Asset Management, Dongbu Asset Management and Hana Daetoo Securities; and the UK office of US fund house Wellington Management; and the Hong Kong office of Total Invest Group Asset Management.