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Quick Take: UBS Gets China License to Sell Private Funds to Onshore Investors

By Aries Poon
Photo: IC
Photo: IC

UBS AG is the second wholly foreign-owned financial institution that has secured a license to sell private funds to onshore investors in China.

The Swiss bank said late Thursday its Shanghai subsidiary now is licensed as a private-fund manager with the Asset Management Association of China. It is obliged to launch its first fund within the next six months.

Private funds raise money, generally from no more than 200 designated companies or well-off individuals, and invest it in securities, financial derivatives and other assets. Unlike mutual funds, private funds usually target wealthier investors with a higher tolerance for risk.

UBS’ approval comes as China continues opening its domestic fund-management market to foreign companies. Market watchers also say that following the record capital outflows in 2016, more onshore investment products might help retain capital onshore.

Fidelity International’s Shanghai subsidiary became China’s first wholly foreign-owned private fund manager in January. In May, it launched the first private fund in China, focusing on onshore bonds.

China promised last year to allow foreign fund managers greater access to the nation’s market.

Contact reporter Aries Poon (ariespoon@caixin.com)

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