An increasing number of foreign asset management companies are applying to become privately offered fund managers in China, where they are expected to offer greater global investment opportunities.
Swiss firm UBS AG, British alternative investment manager Man Group Plc and Singaporean investment management firm Fullerton Fund Management Co Ltd all received privately offered fund manager qualifications in the past three months to conduct securities investment in China.
In January, global asset management company Fidelity International announced that it was the first overseas asset management company to get the qualification. Daisy Ho, managing director at Fidelity International, said it was a milestone for the company, as it would enable Fidelity to expand its business in the world's second-largest economy.
More foreign asset management companies are applying to become privately offered fund managers in China, according to the Asset Management Association of China.
"Global asset management companies are positively entering the Chinese market because they have strong demand to allocate their assets in China and the nation's improved regulatory environment also shores up their confidence," said Ma Wenya, general manager of Sunday Fund Co Ltd, a Chengdu-based asset management company.
China's securities regulator in May vowed stricter regulation of securities firms and funds, warning that repetitive rule violations and illegal practices will lead to business suspensions and license revocations.
The China Securities Regulatory Commission said last June that qualified wholly foreign-owned enterprise and joint-venture companies can apply to become privately offered fund managers at the Asset Management Association of China.
Ma said it was good news that more foreign asset management companies were entering the Chinese market because they can bring advanced management ideas of customer service and more sophisticated investment risk warnings.
"With more players in Chinese asset management market, investors can have more choices and the market is more diversified and international."
A Beijing-based fund manager who declined to be named said China's more open financial market offers opportunities for foreign asset management companies, but it is still uncertain whether they can do business well in China because of market differences.
"About 70 percent of investors in the Chinese stock market are individuals, so foreign companies need to come up with investment strategies tailored for China," said the fund manager.
China is also starting to allow foreign capital to have majority shareholdings in publicly offered fund management companies.
The Hang Seng Qianhai Fund Management Co Ltd, mainland's first onshore overseas majority-owned joint venture fund management company opened for business last September in Shenzhen, Guangdong province. It was jointly established by Hang Seng Bank and Shenzhen Qianhai Financial Holdings Co Ltd.