It is the second such enterprise to launch an onshore fund targeting China’s qualified investors via the private fund management (PFM) licence route and the first onshore equity fund.
The first mover was Fidelity, which launched an onshore fixed income fund in May and is expected to bring another fund to market by the end of the year.
The launch came after four months the firm received its PFM licence in July. The licence allows foreign firms to launch onshore fund products to China’s qualified investors, but face a six-month deadline for bringing a fund to market after obtaining the licence.
The firm planned late last year to have a full team of around 20 people, including portfolio managers, legal and compliance, and sales and marketing, before they went ahead of the product launch, Aries Tung, UBS AM’s head of strategy and business development for China, previously told our sister publication Fund Selector Asia.
The fund, the UBS (CN) China Equity Private Fund Series 1, primarily invests in China’s A-share market, according to the firm. It is managed by Zizheng Wang, portfolio manager in the firm’s Shanghai office. Wang first joined UBS AM in July, according to his Linkedin profile. He was previously a Beijing-based research analyst at investment management firm Hillhouse Capital.
The local China team will lead the investment strategy and fund management, as well as trading and services, Adrian Chen, general manager, said in the statement.
There are now seven firms out of the 22 IM WFOEs that have obtained a PFM licence. Five of those seven have not yet launched a product. Fullerton intends to launch an equity fund and Neuberger Berman plans to launch a fixed income fund.
| Firm | PFM licence obtained | Product launched |
| Fidelity International | January, 2017 | China Bond No. 1 Private Fund |
| UBS Asset Management | July, 2017 | China Equity Private Fund Series 1 |
| Fullerton Fund Management | September, 2017 | – |
| Man Investments | September, 2017 | – |
| Invesco | November, 2017 | – |
| Neuberger Berman | November, 2017 | – |
| Value Partners | November, 2017 | – |
Besides its PFM licence, UBS AM is also a qualified domestic limited partner (QDLP) licence holder. The firm merged its two WFOEs earlier this year to gather both the PFM and QDLP functions under one roof.
The QDLP licence enables the firm to raise onshore money from non-retail investors to buy offshore products given the quota granted by Chinese authorities. The firm has used up the $100m quota it was granted in March 2015.
The firm also holds 49% of UBS SDIC Fund Management, a joint venture in China with SDIC Taikang Trust.
