UBS Asset Management has announced that its Shanghai division has launched its first onshore fund of funds. This makes UBS the first foreign asset manager to launch a fund of private securities funds (FOF) in China.
China's securities regulator on Friday gave approval for UBS Group to hold the majority stake in its securities joint venture. The company has become the first foreign-funded brokerage approved by the securities regulator since the rules on foreign investment in brokerages were implemented, according to the CSRC.
The UBS FOF will use core and tactical investment strategies, which aims to achieve long-term capital appreciation, to deal with the volatile mainland stock market. UBS is anticipating future demand in China's asset management market. The launch also shows the company's research, execution and distribution capabilities in China, said Raymond Yin, the firm's head of the Asia Pacific and China.
Growing our China business is a key element of our strategy"
"The investment strategy" as described by Xia Kun, the fund manager appointed by UBS Shanghai, "aims to achieve long-term capital appreciation while maintaining both moderate beta to the China A-share market and moderate volatility over an economic cycle."
Xia also expressed his team's dedication to risk-minimisation: "our investment team continually evaluates operational risks and investment structuring. Hedge funds are highly dynamic and there is extraordinary value in the exit decision."
The Zurich-headquartered firm received a private fund management license in China back in July 2017 and launched its first onshore equity fund. "Growing our China business is a key element of our strategy. The further opening up of China's financial sector represents great opportunities for our wealth management, investment bank, and asset management businesses," UBS Chief Executive Sergio Ermotti said in a statement.
UBS is still feeling the pain in one of its most important markets after one of its economist's offhand comment about pigs in China transformed into an online scandal.