Shanghai aims to become one of the top global hubs for asset management by 2025.
Expansion in QFLP schemes will open doors to assets in private markets for local and foreign investors.
Shanghai, China, 1 September 2021
Shanghai is dedicated to open up further two-way financial investments with multiple measures like promoting the Qualified Foreign Limited Partner (QFLP) and Qualified Domestic Limited Partner (QDLP) pilot programs, in an effort to accelerate building the city into a global asset management center.
Shanghai will give "qualified investors" access to a wider array of assets in private markets, from next month under the city's pilot investment schemes, just as appetite is surging among global money managers.
Under the Qualified Foreign Limited Partner (QFLP) scheme foreign investors will be allowed to buy shares in unlisted companies, as well as participate in private placements by listed companies, private equity and venture capital products.
The measures will give the nine-year-old investment schemes a makeover and empower China's biggest commercial city in its effort to become a global asset management hub.
It came just as foreign investors bought a record 21.7 billion yuan (US$3.4 billion) of local stocks on Tuesday via the southbound Connect scheme with Hong Kong. China's economy expands record 18.3 per cent in the first quarter of 2021
It will also lift investment restrictions and promote the internationalisation of the yuan, as the Shanghai Stock Exchange seeks to rival Hong Kong for global capital. Hong Kong is the favorite venue for global stock offerings in seven of the past 12 years, where sustained market reforms have lured a spate of jumbo listings.
Shanghai aims to be the asset management hub in Asia and among top cities globally by 2025. The world's top money managers including BlackRock, Bridgewater, Vanguard and Fidelity have already set up offices and started businesses in Shanghai.
Over the decade, the QFLP pilot areas have gradually expanded in China, currently consisting of Beijing, Shanghai, Tianjin, Qingdao, Shenzhen, Guizhou Province, Fujian Province, Zhuhai, Guangzhou, Suzhou and Shandong.
Investing together with China's state-owned enterprises (SOEs)
Strategic Swiss Partners (SSP) has recently entered into a partnership agreement with State-owned enterprises, Shanghai Jinggangshan Guoang Equity Investment Co and Shandong Shunying Equity Investment Fund to jointly establishing a China direct investment fund.
The fund is being registered in the Jinan Free Trade Zone, Shandong Province, as a Qualified Foreign Limited Partnership (QFLP) under Chinese law and managed by Shanghai Guoang Investment Management Co. Ltd.
The Fund will provide foreign investors a preferred and direct access to the vibrant development and exceptional growth opportunities of thoroughly selected Chinese projects, investing alongside China state owned entities. The fund will primarily and directly invest into equity of projects in the following sectors, Health and Life Science, Education, Sports and Culture, Smart City, Renewable and New Energy Technologies.
The new QFLP measures, together with recent reforms, represent China's commitment to becoming a top tier financial center.
With simplified founding and exit procedures and relaxed foreign exchange controls, it is believed that QFLP has a great potential to further develop in China and embrace a brighter future.
For further information:
Fabian Mahalingam, Managing Partner, Head of Business Development
Phone: +41 78 768 18 10
Sylvie Zhou, Managing Partner, Head of Business Development (China)
Phone: +41 79 445 02 68
Additional information on QFLP and Private Equity Market China.
Schroders aims to more than double its QFLP quota to help satisfy demand from Western institutional clients for access to domestic China growth and venture strategies.
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Source: South China Post.
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