Published by Fund Selector Asia – 24th Sep 2018
Ten foreign managers have now received Qualified Domestic Limited Partnership (QDLP) licences after China revived the programme at the beginning of the year.
[UBS AM, Invesco launch onshore funds in China]Axa Investment Management and Robeco registered with the Asset Management Association of China (Amac) on 17 September for their respective QDLP entities in Shanghai, according to Amac’s database.
QDLP managers are allowed to raise money domestically to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and real estate. The QDLP product is a type of private fund, targeting domestic qualified (institutional and high net worth) investors on the mainland.
For each new license holder, the Amac places a six-month deadline for the first product launch. Therefore, the two European managers are expected to launch their first onshore product under the QDLP scheme by mid-March 2019.
The managers were eligible to apply for the QDLP license because they have been running an investment management wholly foreign-owned enterprise (IM WFOE).
Axa IM’s WFOE was established in 21 November 2016, according to the Shanghai Administration for Industry and Commerce. Its Shanghai office is currently run by five licensed employees led by Liao Cheng-shu, general manager for the WFOE and director for Asia business development.
The firm also operates an asset management joint venture with Shanghai Pudong Development Bank. The joint venture, in which the French manager owns a 39% stake, primarily sells mutual funds to retail investors on the mainland.
Separately, Robeco converted its advisory WFOE into a QDLP entity in March this year, making the Dutch manager eligible to apply for distribution licenses. Before the conversion, the firm could not sell offshore products directly to mainland investors, nor manage onshore money. It was allowed to conduct on-the-ground research and service institutional clients only.
The firm appointed head of China research Lu Jie as general manager and legal representative for the Shanghai entity, according to Amac. Shanghai-based Lu is also responsible to advise the onshore equity allocation for the Robeco Chinese Equities Fund.
FSA sought further details on QDLP plans, but the firms did not respond in time for publication.
The QDLP programme was revived at the beginning of 2018 after a three-year halt by the mainland regulator. At least ten additional foreign managers received QDLP licences this year, including Allianz Global Investors, Manulife Asset Management and Mirae Global Investments.
