US fund manager, Vanguard, confirmed that it would be closing its Hong Kong and Japan offices and moving its Asian headquarters to Shanghai.
In a statement to the Hong Kong Stock Exchange, the world’s second-largest fund manager with close to $6 trillion in assets said that it will “seek to implement an orderly exit” from its ETF business in Hong Kong. The number of job losses is unclear as yet.
Vanguard stated that it is considering different possibilities to achieve the orderly exit, including appointing a new investment manager for its investment trust and sub-funds or terminating, delisting and deauthorising the sub-funds.
The statement added that the process could take up to 24 months, depending on the course of action taken.
Vanguard also stated that the decision was based on an extensive review of its international business and in line with its strategy to focus on markets with a retail rather institutional investor focus.
Vanguard moved its regional headquarters to Hong Kong in 2018 after it closed its Singapore office. Its presence in Asia is now limited to an office in Melbourne Australia and two Chinese offices in Beijing and Shanghai.
The company also appointed a new Asia head, Scott Conking, in March. He will now relocate Shanghai along with some of his current staff.
Vanguard, which launched a wholly foreign-owned enterprise (WFOE) in China in May 2017, said the move would see it exit its Hong Kong ETF (exchange-traded fund), mandatory provident fund and index-tracking investment schemes businesses.
Vanguard announced a China advisory joint venture in December 2019 with China's leading fintech company, now known as Ant Group, to provide retail investment advisory services.
Ant, an affiliate of Alibaba Group Holding Ltd, is targeting a more than $200 billion valuation in a dual listing in Hong Kong and Shanghai and operates Yu'ebao, one of the world's largest money market funds.
© 2020 funds global asia