BNY Mellon close to QFII licence
BNY Mellon Asset Management is close to receiving its qualified foreign institutional investor (QFII) licence, says David Jiang, chief executive of the Asia-Pacific asset management business in Hong Kong.
He expects to receive the quota by the end of the year, and the US firm will then launch a QFII product, most likely an offshore equity fund, sub-advised through its planned joint venture with Western Securities, for which the company hopes to receive approval from regulators in early 2010.
Assuming all of BNY Mellon AM's planned initiatives are approved, Jiang expects the firm to hire more than 50 people across Asia and across the whole company next year, with the biggest headcount growth planned in China. New employees to the asset management division will come in on the fund management and distribution side.
Given the strength of the BNY Mellon group -- with the highest credit rating of any US financial institution -- and the fact that other firms are cutting back, Jiang says 2010 will be a very good opportunity to hire. In addition to China, he hopes to expand in Japan and South Korea.
Such growth will be in line with comments made by Chris Sturdy, Asia-Pacific chairman earlier this year. However, BNY Mellon AM did lose out on its China Southern QDII mandate to Wellington in July.
Still, once it has gained its QFII foothold in China, BNY Mellon AM will focus on obtaining a licence in South Korea, and on expanding in its licence market such as Hong Kong and Singapore. The firm already has a strong presence in Australia and Japan, having focused initially on the biggest regional markets.
"We hope to be a top 10 provider in this region," says Jiang, but acknowledges it has further to go on that front.
For example, the firm has a presence in Singapore, and with future expansion it could open the door to potentially offer funds through the state pension system, the Central Provident Fund.
In Hong Kong, BNY Mellon AM is not yet a provider of funds through the Mandatory Provident Fund system either, but it ultimately plans to be. But a licence to allow that is at least a year down the track, reckons Jiang.
As for Southeast Asia, the firm started to do more in that region about 18 months ago, he adds. "But it takes a bit longer to work out what licences and what kind of presence we need there," Jiang says. Still, BNY Mellon has won sovereign fund mandates in that region, as well as sub-advisory mandates for retail, but he would not reveal any names.