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November 23, 2020

Pictet bets on China with launch of Shanghai unit

By Amala Johney

Pictet Asset Management, the asset management arm of Geneva-based Pictet Group, has set up a unit in Shanghai in a bid to tap the evolving fund market in China.

This wholly foreign-owned enterprise (WFOE) will allow the firm to raise funds from mainland investors into its offshore strategies under China’s qualified domestic limited partners (QDLP) scheme.

Pictet Group senior partner Renaud Planta said: “The expansion into China represents a significant milestone in the 215-year history of Pictet.

“The global macro environment is not without challenges but given the Group’s financial strength and our long-term commitment to the China market, we remain confident that now is the time for us to take this important step.”

According to Pictet Asset Management Asia ex-Japan CEO Junjie Watkins, the new unit will initially focus on cross-border investments and eventually incorporate local investment capabilities.

The firm has been investing onshore for global clients through several programmes, including the Renminbi Qualified Foreign Institutional Investor (RQFII) programme, Shanghai-Hong Kong Stock Connect, among others.

In addition, the onshore footprint is expected to complement the asset manager’s overall strategy in China.

Watkins added: “We look forward to introducing our global expertise and product offering to onshore investors, who are increasingly receptive to diversifying their investments as market uncertainties persist.”

In October this year, Pictet set up its first US office in New York City.

China moves by other asset managers

Pictet is the latest in a list of foreign asset managers expanding their presence into China, eyeing its fund market.

The move is the result of the liberalisation of China’s financial services sector in a bid to boost competition.

In September this year, Edinburgh-based Baillie Gifford established an office in Shanghai and completed registration as a private securities fund manager in China.

US-based investment manager Russell Investment is among the other companies that registered with the Asset Management Association of China this year.

In October this year, Standard Chartered submitted an application for a brokerage licence with the China Securities Regulatory Commission (CSRC).

In addition, Fidelity International and AllianceBernstein have also applied to establish mutual fund units in China. Meanwhile, this August, American asset manager BlackRock secured the nod of the China Securities Regulatory Commission to establish a mutual fund unit in China.

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