Fidelity International’s wholly foreign-owned enterprise (WFOE) private fund management company has launched of two new funds, including its first equity A-Share private fund and its second fixed-income fund. The successful launch further diversifies Fidelity International's product offering in China, enabling its clients to have a breadth and depth of products to choose from.
The two new funds are Fidelity China Equity No. 1 Private Fund (The Equity Fund) and Fidelity China Bond Opportunity No. 1 Private Fund (The Fixed Income Fund). The Equity Fund will primarily invest in China’s A-share market, leveraging on Fidelity International’s extensive on-the-ground research capabilities and its successful track record in investing in the A-share market for years. The fund is Fidelity International’s first onshore equity fund in China.
Fidelity International is already the largest China offshore manager by equity AUM and its onshore presence further solidify its leadership positon in A-share investment. In January 2017, Fidelity International became the first independent global asset manager to obtain a private fund management qualification from the Asset Management Association of China (AMAC). It now has a total of three private funds in China to offer to qualified investors, underscoring Fidelity International's long-term commitment to the onshore China market and its client base in the country.
Daisy Ho, Managing Director, Asia ex Japan, Fidelity International, said: “With a strong commitment to China market and local investors, we aim to accelerate our business development in the country over 2018 and beyond and will continue to develop more funds based on investor needs leveraging our market leading onshore investment and research capabilities.”
Jackson Lee, Country Head of China, Fidelity International, said: “As a leader in China’s WFOE private fund management industry, we are thrilled to introduce two more private funds to China’s market. This further diversifies our product offering and demonstrates our continuing commitment to serving the needs of China’s eligible institutional and high net-worth investors.
This first equity fund, with a focus on the A-share market, is a natural addition to our product range. A-share inclusion to MSCI is a further step forward in the opening up of China’s capital markets which will be positive for investors. We are looking forward to continuing to develop our product offering in next two to three years to help investors in China meet their investment needs.”
The Equity Fund is managed by Lynda Zhou, a sophisticated investment specialist with over a decade of experience and a CFA Charter holder. She will be based in Shanghai and will work closely with the local and global equity research team, following Fidelity’s bottom-up approach to identify investment ideas within the market.
“A-shares will be included in MSCI indices in June 2018, attracting more attention from global investors. Rising participation of foreign institutional investors will make the market more fundamental driven. China’s domestic A-share market is the second largest stock market in the world with a vast array of stock picking opportunities. With the support of our on-the-ground research team, we are using a long-term fundamental investment approach to identify unrecognised investment value within the A-share market. Looking forward, the emphasis of economic activity will be on ‘quality over quantity’. We will focus on opportunities arising from the long-term structural changes that are underway in China,” Zhou says.
The other Fixed Income Fund marks the second fixed income private fund of Fidelity International and it aims to achieve income and capital appreciation. It will be managed by Freddy Wong. He is also the portfolio manager of Fidelity International’s first onshore Chinese fund launched in May 2017.
Fidelity International’s WFOE in Shanghai was established in September 2015. It was the first global asset manager to register with the Asset Management Association of China (AMAC) as a private fund management company in January 2017. This qualification allows Fidelity International to manage private funds in China. Before the WFOE entity establishment, Fidelity International set up representative offices in Shanghai and Beijing as early as 2004 and 2008. It also has an operation and technology centre in Dalian that has almost 500 staff.
Fidelity International has been investing in China for 20 years. It has a quota of US$1.2 billion under the Qualified Foreign Institutional Investor (QFII2) scheme, which is one of the largest amounts held globally. It also received a quota of RMB 460 million under the RMB Qualified Foreign Institutional Investor (RQFII3). The QFII and RQFII quotas allow Fidelity International to invest in Chinese capital markets.
