Pictet taps into growing China opportunities with new Shanghai WFOE launch

Shanghai skyline

Pictet Asset Management, the investment management arm of the Geneva-headquartered wealth management giant Pictet Group, is opening a Shanghai office under China’s wholly foreign-owned enterprise (WFOE) rules, allowing it to further capitalise on growing investor demand there.

Pictet AM has registered its Shanghai WFOE with the Asset Management Association of China (AMAC), enabling the firm to raise funds from domestic mainland investors to invest in its offshore strategies under the Qualified Domestic Limited Partners (QDLP) programme.

The move – which follows WFOE launches by several high-profile hedge fund firms in recent years – builds on Pictet AM’s existing China strategy.

The firm has already been investing onshore for global clients through several programmes, including the Renminbi Qualified Foreign Institutional Investor (RQFII) programme, Shanghai-Hong Kong Stock Connect, Bond Connect and China Interbank Bond Market (CIBM) Direct Access.

In July, Pictet AM – which manages a range of long-only and hedge fund strategies - also unveiled its first northbound fund, Pictet Strategic Income, under the Mutual Recognition of Funds (MRF) scheme.

Renaud de Planta, senior partner of the Pictet Group, hailed China’s asset management industry as one of the “biggest and fastest-growing” in the world, and said the new Shanghai unit is a “significant milestone” for the firm.

“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,” de Planta said.

Pictet’s China onshore operation will begin an initial focus on cross-border investment before gradually developing local investment capabilities, said Junjie Watkins, Pictet AM’s CEO, Asia ex-Japan.

“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.”

Winton Group, the quantitative hedge fund pioneer led by David Harding, Ray Dalio’s Bridgwater Associates, and Leda Braga’s Systematic Investments, along with French trend following hedge fund Metori Capital, are among the hedge fund firms who have established WFOE operations in China.

Man Group opened its first local office in China in 2012, later establishing a base in Shanghai the following year under the Shanghai Qualified Domestic Limited Partnership (QDLP) scheme.

In September this year, Man AHL - the pioneering quantitative investment unit of London-listed global hedge fund giant Man - was granted a qualified foreign institutional investor (QFII) license in China, allowing its funds greater access to the country’s domestic capital markets.