Mutual fund recognition: Barings prepares for Hong Kong launch

Hong-Kong-1Baring Asset Management plans to launch a range of Hong Kong-domiciled funds to take advantage of the much anticipated mutual fund recognition scheme between Hong Kong and China. Mutual fund recognition would make funds domiciled in Hong Kong eligible for sale in China, although they would still have to be approved for sale by the Chinese regulators. Gerry Ng, chief executive officer, Asia excluding Japan, at Barings, says: “The development of a local fund range … positions us to take advantage of the anticipated mutual recognition platform between Hong Kong and China and the increased demand for locally domiciled funds that we expect to follow.” Alexa Lam, deputy chief executive officer at the Securities and Futures Commission in Hong Kong and architect of the scheme, told Funds Europe’s sister publication Funds Global Asia in February that the mutual fund recognition scheme is “going through the final administrative procedures”. Lam’s term expired at the end of February and she was expected to retire, leading the industry to speculate that the scheme would launch before then. She was eventually re-appointed for just one year, instead of the usual four years. Despite sporadic and vague statements that mutual fund recognition is inching closer, there has been no official announcement. Qiumei Yang, head of Asia Pacific, ICI Global, says mutual fund recognition is a promising development that could pull together the region’s disparate markets. However, international infrastructure providers are concerned about the wider context of the scheme between Hong Kong and China, and the profound implications it could have. Many details are still unclear; global custodians and other international players, for example, are being inundated with enquiries. “With this planned new fund range we look forward to continuing to expand our franchise in Asia and our commitment to the region, developing increasingly bespoke solutions in response to client demand,” Ng says. Barings, which has more than $14.4 billion (€10.6 billion) of assets under management, €3.5 billion of which are invested in the Greater China region, has been active in China for over 220 years. It opened its first office in Hong Kong in 1973. In 1982 it launched a mutual fund investing in the region and in 1985 one investing in China’s domestic A-share market. HSBC has been appointed in principle as administrator, trustee, transfer agent and custodian for the range. ©2014 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.