Fidelity Investments Launches Private Equity Product in China
Fidelity Investments' international arm has rolled out two private equity funds in China, going after wealthy individuals and institutional investors.
According to news reports, the two new funds include the Fidelity China Equity No. 1 Private Fund and a fixed income fund that expands the firm's current offering in China. In May 2017, Fidelity launched its first fixed income fund in China for high-net-worth investors in the country. The new private equity fund is focused largely on China's A-share market and will be managed by portfolio manager Lynda Zhou, who is based in Shanghai.
Zhou told International Investment that A-shares will be part of the MSCI indices by June of this year, which should attract more attention from investors around the globe. "China's domestic A-share market is the second largest stock market in the world with a vast array of stock picking opportunities," Zhou said in the report. "We are using a long-term fundamental investment approach to identify unrecognized investment value within the A-share market." International Investment noted that Fidelity already has three private equity funds in China with assets under management of $411 billion from clients in Asia, Europe, the Middle East and South America.
The new fund on the part of Fidelity was expected to launch in the middle of January or later, but insiders told the Asia Times that the China Securities Investment Fund Association is approving the registration of foreign funds faster than in the past as the country seeks more foreign investments. Asia Times noted that, at the end of 2017, Man Group and UBS also launched private equity funds in China, while BNY Mellon received approval to set up a foreign-owned business in Shanghai.
Fidelity isn't the only one setting its sights overseas to acquire more assets under management. Early last month, Vanguard, the index investing leader, announced that it was going after younger investors in the U.K. by launching two new target date retirement fund products for people expecting to retire between 2060 and 2065. According to a report at the time in the Financial Times, the funds have fees of 0.24% and invest in a mix of Vanguard equity and bond index funds and exchange-traded funds. Like Vanguard's other target-date retirement fund products, the investment vehicles become more conservative as the investor nears retirement. Vanguard has 11 target date retirement funds, which tend to be more heavily weighted toward stocks when the investor is younger and then become more conservative as investors close in on their retirement age.