Larum to run UBS’ China tilt

By Michael Bailey

THE former chief executive of UBSGlobal Asset Management (UBSGAM) in Australia, John Larum, has taken up the newly created role of Chinese chief executive for the manager as it gains approval for a joint venture investment firm based in Shenzhen.

UBS group will own 49 per cent of the new manager, UBS SDIC Fund Management, making it the first to take advantage of new rules passed on January 1 raising the maximum foreign stake in a Chinese investment company from 33 per cent.

The major shareholder is a subsidiary of China’s State Development and Investment Corporation, which invests in physical infrastructure like power, coal and ports as well as financial and asset management enterprises.

Larum will oversee the new manager’s 48 staff from Hong Kong, and work with UBS’ Chinese chairman, James Hong.

Larum ran UBSGAM’s Australian operations until 2003, when he handed over to Colin Woods and embarked on a series of projects for the business, the most recent its three-month compliance review driven out of London.

The global chief executive of UBSGAM, John Fraser, another former Australian boss, said the UBS SDIC business would initially run Chinese asset products for a domestic audience, but as regulations liberalised it would distribute UBS products from around the world, and also manufacture the group’s Chinese equity funds.

“I used to say that a Chinese venture would take 10 to 15 years to make a profit. I think with new regulations that’s come in to seven to 10 years and is now probably even less,” Fraser said, adding the new business was underpinned by extreme due diligence and the experience of a previous unfulfilled UBSGAM venture in the country.