Fidelity set to expand wealth product offering

Fidelity International said it is looking forward to the opening-up of China’s capital markets, aiming to complete its product offering in the country in the next one to three years.

“Our ultimate goal is to provide full retirement and asset management solutions for our clients in China,” said Daisy Ho, managing director of Asia excluding Japan for Fidelity International. She made the comments on Wednesday, when the company’s Dalian, Liaoning province office was celebrating the 10th anniversary of its founding.

Starting with fixed income products, the privately-owned investment solutions provider will launch different asset classes in China.

“The biggest opportunity lying ahead for us is that China has allowed foreign asset managers to enter its private fund market,” Ho said. “Private funds are just the beginning of a new journey. We are also hoping to join China’s pension reform.”

The London-based asset management company will launch its second product in China at the end of 2017 or the beginning of next year, she said, following the launch of its first private fund in the country on May 5.

It is part of the firm’s long-term growth strategy in the world’s second-largest economy. The private fund, available to eligible Chinese institutional and high-net worth investors, primarily invested in Chinese onshore bond markets.

Adopting a bottom-up investment approach, analysts at Fidelity International will look for investment opportunities by reviewing corporate fundamentals, such as a company’s management and profitability, in addition to analyzing the economic cycle and interest rates. The asset manager said it will continue to expand its research and development team in Shanghai, which is focused on China’s A-share and bond markets.

KPMG, a global audit and tax consulting firm, said in a report that China will open up a wide market for foreign asset managers, so that they will embrace more opportunities to carry out business in the country.

As of end-September, China’s private funds amounted to 10.32 trillion yuan ($1.58 trillion), up by 860 billion yuan in the third quarter. About 63 percent of the total were funds for private equities and venture capital, which stood at nearly 6.48 trillion yuan.

Influenced by the market environment, funds for securities shrank to 2.2 trillion yuan, down by 547.2 billion yuan in the first nine months of this year, according to data from the Asset Management Association of China.

The AMAC issued a notice on its website on Tuesday, saying that it will further strengthen its supervision over the registration and filing of private funds, as well as the selfdiscipline of private funds, to maintain industry order.

“The private fund market is still evolving in China. It’s perfectly normal for regulators to ramp up risk control with the aim of building a solid foundation for the market,” said Ho.

She added that Fidelity International can bring to China its overseas experience in risk control accumulated through financial crises.

China has allowed foreign asset managers to enter its private fund market.” Daisy Ho, managing director of Asia excluding Japan for Fidelity International