Hermes has joined forces with Chinese firm CSOP Asset Management to launch the CSOP Hermes China A Share fund, a Dublin-domiciled Ucits fund with weekly liquidity, rather than the standard daily.
CSOP acts as the manager for the fund, while Hermes acts as the adviser. The fund claims to be the first to offer international investors “direct access” to China’s burgeoning population of star private fund managers – otherwise known as ‘sunshine managers’. The fund managers they are seeking out run unconstrained portfolios for both high net worth and institutional investors, but have greater flexibility than their mutual fund peers.
The fund will invest directly in A-shares, engaging with three to five sunshine managers to provide a concentrated exposure to the opportunities that come from economic growth and structural reform.
The fund will use Hermes’ ‘renminbi qualified foreign institutional investor (RQFII) quota’, which is a policy of the authorities which allows qualified investors to channel renminbi funds out of the People’s Republic of China to the China mainland securities market.
The A-class fund has an initial issue price of £100, a minimum initial investment of £1,000 and £500 minimum holding. The fund also has a minimum additional investment of £1,000. The investment management fee is 2 per cent and a performance fee of 20 per cent.
www.hermes.co.uk
Comment:
The main cause for concern this year for China has been the so-called ‘economic slowdown’ we were expecting.
It was at first anticipated to be a hard landing, but was more of a soft one. But any threats to the largest emerging market country were hardly new to existing investors in the space.
It is an interesting time for both Hermes and CSOP to be launching a China fund, given the economic turbulence. The Shanghai composite index saw a gradual decline at the start of the year, but since June has been on the increase. It has still to see 2011’s market highs. This fund will be investing in a small number of star managers, in the hope of benefiting from the success of the growing increase in them.
Although CSOP is relatively unknown, it has over $7.8bn (£4.8bn) of assets under administration. The group’s knowledge of the China market will help Hermes, which already has a successful track record in the region.
