HONG KONG Fidelity International said on Friday it had launched its first onshore Chinese fund for wealthy mainland investors, a key milestone for foreign fund managers wanting to expand in the tricky Chinese market.
The asset manager's first private fund in China, which primarily invests in China's $9 trillion onshore bond markets, will be available to Chinese institutional and high-net worth investors, the company said in a statement.
"Undeniably, the RMB bond markets are the future of Asia's bond markets and will play in global financial markets for many years to come," Freddy Wong, the fund's manager, said in a statement.
Fidelity International this year became the first global asset manager allowed to launch investment products in China through a wholly-owned local subsidiary, as Beijing further liberalizes its capital markets.
The company's Shanghai-based unit registered with the Asset Management Association of China (AMAC), qualifying it to create onshore investment products for Chinese institutions and wealthy individuals, the company said in January.
Previously, foreign asset managers looking to distribute investment products in China had to operate through minority-owned joint ventures with Chinese firms, but Beijing has been gradually loosening the reins.
A growing number of foreign financial institutions, including Aberdeen Asset Management (ADN.L), U.S. hedge fund Bridgewater Associates and Vanguard have recently set up wholly foreign-owned enterprises (WFOE) in China. But they still need AMAC registration to launch onshore products.
Since 2004, Fidelity has been offering offshore capabilities to Chinese investors through partnering with banks under the Qualified Domestic Institutional Investor (QDII) scheme. Fidelity also owns a quota of $1.2 billion under the Qualified Foreign Institutional Investor (QFII) scheme, which allows foreign institutions to buy Chinese stocks and bonds.
(Reporting by Michelle Price; Editing by Randy Fabi)