Chinese asset manager HFT joins Hong Kong club
Joint-venture HFT Investment Management opened a subsidiary in Hong Kong yesterday, the latest example of a Chinese asset manager seeking to use the city as a platform for international growth.
Tian Rencan, HFT’s CEO, says that the establishment of HFT Investment Management (HK) “will enable our company to expand overseas and help to make it more competitive”.
HFT Investment Management is a joint-venture between BNP Paribas and Haitong Securities. Its Hong Kong CEO Chi Lo says the subsidiary’s scope of business will include mutual funds and private placements, with an initial focus on the latter by serving institutions and high-net-worth individuals.
The company will now strive to develop its international client base out of Hong Kong and will leverage the expertise of its parent to offer clients cross-market and cross-regional investment management services in segregated accounts.
Lo says the company’s key clientele include high net-worth individuals and institutional investors from Hong Kong, mainland China and Taiwan, as well as foreign private and corporate investors.
He Yiwei, vice-president of institutional sales of HFT HK, adds: “We have already got commitment from some high-net-worth individuals, rich families and insurance companies in Europe. The talk is also underway with some private banks in Japan and the US.”
Led by industry veteran Tian, who boasts 10 years of experience with Fortis Group in Hong Kong and is fluent in English, French and Mandarin, HFT has a leg-up in terms of overseas marketing and serving international clients.
HFT has been serving as an investment adviser to overseas institutions since 2004, managing $3 billion in assets from sovereign wealth funds, pension funds, foundations, insurance companies, family offices and high-net-worth individuals.
Approved as a qualified domestic institutional investor (QDII) in August 2007, HFT launched its China Overseas Best Selection Fund in June 2008 – the best performing QDII fund in China with an accumulated return of 72.9% as at November 23.
Earlier this year, the State Administration of Foreign Exchange raised HFT’s QDII quota to $1 billion, enabling it offer more fund products.
With the Hong Kong subsidiary’s international exposure adding value to HFT’s QDII fund clients in China, Tian anticipates launching a second QDII fund next month, pending regulatory approval, with a Greater China theme focusing on Hong Kong and Taiwan.
On the retail front in Hong Kong, HFT plans to launch mutual fund products invested in equity and fixed-income assets. Lo discloses that an RMB fixed-income product will be available to Hong Kong investors within the next 12 months.
Hong Kong has seen Chinese asset management firms flocking to Hong Kong to build international arms, including China Southern, Harvest Global Investment, and China Asset Management Company (AMC).
China AMC (HK), together with Citigroup First Investment Management, launched the China Select Fund on November 18, focusing on equity investments both in China and offshore. The former, acting as the sub-manager, formulates the investment strategy and selects stocks by a bottom-up approach.
Tian acknowledges that HFT is also considering whether to engage in a similar cooperation with a local partner to leverage its research and investment capability in the A-share market.
With registered capital of HK$60 million ($7.7 million), HFT HK obtained approval from the CSRC in February and was recognised as an investment adviser and asset manager on October 27.
Having a lean team of 10, settling next to BNP Paribas on the 30th floor of Exchange Square Three, Tian confirms that the Hong Kong subsidiary has already completed some key hires and will recruit more locally, while also transferring some staff from its Shanghai headquarters.