First State moves offshore as FirstChoice passes $3bn mark
First State Investments has made the first official move to establish a presence in China, with its Chinese funds management venture lodging an application with the Chinese Securities Regulation Commission to establish a domestic funds management business.
First State, a wholly owned subsidiary of the Commonwealth Bank, will form a joint venture with Chinese companies Hantang Securities Company, China Southern Airlines Group Company and Nanjing YPC Refining and Chemical Company.
While the latter two are effectively serving as passive shareholders, Hantang’s solid reputation appealed to First State when forming the partnership, according to First State Investments chief executive Ian Jenkins.
“Hantang is one of the top 10 capital securities companies, they are very highly regarded in terms of their business practices and approach, and are probably one of the fastest growing companies, so we found them a good quality partner,” Jenkins says.
To be called FSI Hantang Fund Management Company Limited, the new entity will operate nationally with offices in Shanghai, Shenzhen and Beijing initially. Expansion into other major Chinese cities is expected as the company develops.
The new company will only offer mutual funds initially, as the offering is limited by Chinese regulations.
The move comes asColonial First State’s flagship FirstChoice platform reaches $3 billion in total funds under administration.
Launched just over a year ago, the master trust has attracted strong inflows both through Commonwealth Bank and independent advisers.
Colonial has also tried to entice more investors by adding four new single manager options fromUBS,Platinum452 Capital, and Australian Small Companies, and introducing a management fee rebate since the platform’s launch.
However competition in the platform market is becoming more fierce, with the introduction of OneAnswer, a joint venture between ANZ andING, late last year, andPerpetual Investmentsflagging the launch of a new multi-manager platform in the last quarter of this year.
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