Fidelity Eyes Chinese Mutual, Pension Fund Markets

Company to provide domestic investment products to institutional investors, and high net worth individuals.

Fidelity International said it is looking into getting into the mutual fund and pension fund market in China, according to a report from Reuters.

“China is a market of high strategic importance to us,” Daisy Ho, Fidelity’s managing director for Asia excluding Japan, told a news conference in Shanghai. “Any development in opening up China’s capital markets, whether it’s about the mutual, private or pension fund market, we’re hugely interested.”

The Chinese market has been ripening for foreign and institutional investors over the past year. In February, Chinese pension funds began investing in securities in a move to boost returns. It was a significant departure from their traditionally low-risk, low-return strategy that involved leaving the funds in banks, or investing in treasury bills. And in November, the Chinese government said limits on foreign ownership of joint ventures in China’s financial services sector will be relaxed over the next five years.

Fidelity Investment Management (Shanghai) Co., Ltd., a wholly foreign-owned enterprise under Fidelity International, was founded in 2015, and earlier this month was approved to run a private equity investment fund management business by the China Securities Investment Fund Association. 

Fidelity International said it will provide domestic investment products to qualified institutional investors, and high net worth individuals in China, which it said “will have far-reaching significance for Fidelity International’s long-term strategy in China.”

Fidelity’s China Country Head Jackson Lee told Reuters that the company, which launched three private funds in China in the past year, would not be forming joint ventures in local markets. He added that Fidelity’s newly-launched equity fund would benefit from the company’s existing research capabilities, and experience investing in China’s yuan-denominated shares.

Fidelity International has been operating in China since 2004, and has established cooperation with banks through qualified domestic institutional investors (QDIIs) to provide investment services. 

“China is significant to Fidelity International’s global growth strategy,” said the company. “We are ready to assist domestic investors in capturing long-term investment opportunities in China.”

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