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1st private fund issued by wholly foreign-owned company is launched

FIDELITY International today became the first wholly foreign-owned asset company to launch a private fund in China, indicating further opening up of China’s capital markets.

The fund, Fidelity China Bond No. 1 Private Fund, will mainly invest in Chinese onshore bonds, the company said in a statement. It opened today through its wholly-owned Shanghai unit which was set up in September 2015.

The fund will be sold to eligible Chinese institutional and high-net worth investors, according to the statement.

The market size of China's onshore bond market is currently over 65 trillion yuan (US$9.4 trillion), and is expected to reach 100 trillion yuan by 2020, which "offers tremendous opportunities to develop investment solutions for domestic investors," said Freddy Wong, fixed income portfolio manager of Fidelity International, who manages the fund.

Fidelity International said in a media roundtable earlier that the fund would be research-focused long-term investment, strengthening its presence in Chinese capital markets.

The company has invested US$1.2 billion under China's Qualified Foreign Institutional Investor (QFII) scheme, and 460 million yuan (US$66.7 million) in RMB Qualified Foreign Institutional Investor (RQFII) scheme.

Fidelity registered with the country's Asset Management Association of China (AMAC) as a private fund management company in January 2017, the first international fund manager to get such permission to issue yuan-denominated private funds in China.

Before that, foreign financial institutions had to tie up with local partners in getting license to offer financial products in the mainland market.


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