Five global asset managers ink agreements with Shanghai regulators

A total of five global asset managers, including industry big names such as Schroders Capital and Aspect Capital, signed agreements with the Shanghai local regulators and industry associations on Wednesday, further elevating the city's capabilities to allocate resources from all over the world, said officials and company executives.

The agreements were signed during the 2024 Lujiazui Financial City Global Asset Management Partner Conference held on Wednesday.

Based on the agreement, UK-based Aspect Capital, with an asset under management of $7.5 billion, will set up operations in Lujiazui, the financial hub of Shanghai.

According to Li You, chief compliance officer for Aspect Capital in China, the company has already set up a wholly foreign-owned enterprise in Lujiazui. It will file for a WFOE private fund manager registration with the Chinese regulators later this year to conduct onshore fundraising and investment management businesses. Meanwhile, they will explore developing a qualified domestic limited partners business with which entities registered in overseas markets can raise funds in the Chinese onshore market and use the financing to invest overseas.

Public data shows that Aspect Capital has been approved as a qualified foreign institutional investor in late 2022, allowing it to access the Chinese securities market.

"With our expertise in commodity trading advisor strategy, we will develop differentiated products specially for the Chinese market and increase our investment in China. We would also like to make our due contribution to the development of Lujiazui, which is already an important hub where international asset managers gather and expand their businesses in China," said Li.

According to Xiao Jian, director of the Lujiazui Administrative Bureau of the China (Shanghai) Pilot Free Trade Zone, the local authorities initiated the global asset management partner plan in July 2021. Based on this, Luajiazui has made much progress in terms of gathering key industry players, the construction of the ecosystem and communication.

As of now, Lujiazui is home to more than 8,000 financial institutions. It has accommodated nearly 80 percent of China's foreign asset management firms, 40 percent of the foreign banks, nearly one third of the mutual fund companies and 25 percent of the insurance companies' asset management arms.

Continued efforts will be made to advance the two-way financial opening-up, deepen the experiment of the QDLP program, and facilitate the development of fintech and secondary funds to provide more support to the asset management industry, said Xiao.

Yan Hong, a professor from the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, suggested that Shanghai can fully use its advantage of the Shanghai FTZ, especially its Lin-gang Special Area, to conduct offshore financial services by adopting internationally advanced financial business models and supervision mechanism.

"The development of offshore financial services, combined with the participation of international companies, will not only facilitate the development and reform of onshore financial businesses but also help to elevate Shanghai's role as an international financial center," he said.