E Fund Management Co, China's second biggest fund house, plans to launch a new hedge fund in Hong Kong this year and is also preparing to roll out a mutual fund there as mainland asset managers step up expansion overseas.
E Fund, which already launched a hedge fund last year through its Hong Kong subsidiary, plans to launch a similar fund soon that focuses on listed companies with businesses mainly in China, managing director Nathan Lin said on Friday, adding that he hopes to also launch a mutual fund this year.
"Overseas asset management business is an indispensable part of our goal to become a leading fund house in China," Lin said in a telephone interview.
At least eight Chinese fund houses, including E Fund, Harvest, Dacheng and China Southern, have set up businesses in Hong Kong, seeking to woo overseas investors away from foreign rivals such as Allianz Global Investors and Fidelity, taking advantage of familiarity with China.
Having a foothold in the region's financial hub could also help Chinese asset managers hone their overseas investment skills and facilitate businesses under China's Qualified Domestic Institutional Investor (QDII) scheme, which allows Chinese money to be invested abroad.
Shanghai-based fund consultancy Z-Ben Advisors forecast that by the end of 2014, all qualified fund companies in China will have established subsidiaries in Hong Kong, and by the middle of the decade, those with global ambitions will extend their reach into other money centres including New York, Tokyo and London.
To accelerate growth, E Fund, which currently hires eight people in the former British colony, plans to double its staff as well as registered capital in Hong Kong, Lin said. The company, headquartered in the neighbouring city of Shenzhen, in southern China, is also looking at acquisition opportunities globally to strengthen its investment capability.
Lin forecast that emerging markets including China, India, Russia and Latin America will become ideal investment destinations over the next few years as growth in the United States and Europe will be hampered by efforts to reduce debts.
E Fund set up its Hong Kong subsidiary in August, 2008 after obtaining one of China's first two such licences, and launched a Greater China hedge fund the following year.
The size of the fund is small as it takes time to build brand awareness, client relationships and a sales force in Hong Kong, where in the long run, E Fund aims to replicate its success in the domestic market.