Barings Asset Management has become the first wholly foreign-owned enterprise (WFOE) in China to issue an onshore private fund management product to international investors via a new foreign investment scheme.
The bond fund has been issued via the Qualified Foreign Institutional Investor (QFII) and renminbi-denominated QFII (RQFII) programme, according to the Shanghai Municipal Financial Regulatory Bureau.
The scheme was launched earlier this year as China looks to open its funds market yet further to outside investors. It went live on November 1.
The bond fund issuance comes a year after Barings opened its first onshore private fund for domestic investors in China, back in November 2019.
HSBC acted as the custodian for the latest fund launch. Brian Godins, head of securities services, Asia-Pacific at HSBC, said: “Allowing QFII/RQFII to invest in onshore private funds is an important breakthrough particularly for offshore investors with WFOE PFM [private fund management license] established in mainland China.
“It helps WFOE PFMs who have not yet established a domestic distribution channel or brand recognition in mainland China, to obtain seed capital from its affiliated QFII/RQFII when launching onshore private funds,” said Godins.
“This will not only help boost the attractiveness of QFII/RQFII and draw more foreign capital into mainland China but also facilitate the development of the local asset management industry,” he added.
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