Published by Asia Asset Management – 6th Jul 2018
US asset management giant Invesco Ltd. is seeking to penetrate deeper into China with stronger collaboration between its Mainland joint-venture company and its wholly-owned onshore investment firm, according to a senior company official.
China is a key market for the company in Asia, and being present on-the-ground is important to grow its business in the country, Terry Pan, Invesco’s chief executive officer for Greater China, Southeast Asia and Korea, told reporters at a press conference in Hong Kong on July 5.
The company made inroads into China 15 years ago through its joint-venture company, Invesco Great Wall Fund Management, which focuses mainly on the mutual fund business in the Mainland. The tie-up with Shenzhen-based Great Wall Securities was one of the first Sino-US asset management joint ventures in China.
But with China’s financial market liberalisation in recent years, Invesco is now looking to diversify in the country through a “multi-pronged” strategy, according to Mr. Pan.
He says the opening of Invesco’s wholly foreign-owned enterprise (WFOE) in April 2017 is an important step in this regard.
WFOE is a Chinese scheme that allows subsidiaries of foreign asset managers incorporated in Shanghai to pursue onshore fund business.
Invesco’s WFOE was registered as a private fund manager with the Asset Management Association of China in late 2017 and launched its first onshore private securities fund this April.
“The [China] market is evolving. There is no ‘magic formula’ for our China approach other than the fact that you have to be in it,” Mr. Pan says.
According to Mr. Pan, Invesco’s WFOE can “coexist” with Invesco Great Wall Fund Management, and the company will press ahead with their collaboration in order to help foreign clients access the Chinese market.
He acknowledges that cross-border programmes, including the bond and stock connect schemes, allow foreign investors to trade in Chinese assets from Hong Kong.
But he says international investors are not only seeking access to the Chinese market but also want asset management services with “global standard”.
Mr. Pan believes existing cross-border channels are “excessive” and expects them to merge in the longer term.
The Stock Connect programme allows investors in Hong Kong and China to trade stocks in each other’s markets.
The Bond Connect programme is currently a one-way northbound channel that lets foreign investors in Hong Kong access the China interbank bond market. The southbound channel that will enable Chinese investors to trade Hong Kong bonds has not been opened yet.
Invesco had US$934.2 billion of assets under management as at March 31, 2018.
