Outbound investments on again

Business | Reuters 9 Feb 2018

China has resumed an outbound investment scheme after a two-year hiatus, granting licenses to about a dozen global money managers in signaling that Beijing now has less worries about capital outflows amid a surge in the yuan.

Foreign fund managers with newly awarded quotas will be able to raise money for investment overseas under the Qualified Domestic Limited Partnership plan for the first time since late 2015.

The quota-based Shanghai scheme was unofficially suspended when Beijing tightened capital controls amid turmoil in its stock and currency markets.

Experts expected a newly-qualified firm would be allowed to invest up to 316 million yuan - the equivalent of US$50 million (HK$389 million) - under the QDLP, but sources said the quotas were not distributed evenly.

Among the firms awarded fresh licenses this year, the investment arms of JPMorgan Chase, Standard Life Aberdeen, Manulife Financial and Allianz have over the past month set up outbound investment subsidiaries in Shanghai to conduct QDLP businesses, registration information on government websites suggests.

Other asset managers preparing for QDLP businesses include the asset management arms of BNP Paribas, AXA, Robeco and Mirae Asset.

Upon receiving a license, asset managers must complete their fundraising efforts within six months.

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