First State reopens China fund after four years

First State reopens China fund after four years

First State Investments has reopened Martin Lau’s £372m Greater China Growth fund, four years after it was closed to new investment, Investment Adviser can reveal.

The fund, run by Mr Lau and Sophia Li, has removed the 4 per cent initial charge that had been imposed on new investments in January 2012 following significant inflows.

The move marks the first time a First State fund has reopened since it split its First State Stewart business in two last year. Mr Lau works as part of FSS Asia, now a separate entity from the Stewart Investors business that is home to the business’ giant Leaders funds.

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A number of the firm’s other portfolios, including Jonathan Asante’s Global Emerging Market Leaders fund, remain closed to new investment.

First State said in a statement: “Due to capacity concerns and to protect existing investors, the Greater China Growth fund was closed to new investment on January 1 2012. We are now at a point where we feel able to remove the mandatory initial fee across this strategy, including the First State Greater China Growth fund (UK Oeic), effective from February 25.”

The China strategy had more than £600m in assets under management at the time of its soft closure, but this figure has since dropped to less than £400m following a challenging time for investors in the country.

It has continued to perform strongly on a relative basis, however, returning 32.8 per cent over the past five years compared with 5.8 per cent from the IA China/Greater China sector, according to FE Analytics.

One fund buyer commented: “We would be happy to see it reopen as it was a long-term hold for us, which we were forced to sell when they closed it.

“However, we would want some assurances that the fund would not close again in the short-term as this would provide us with the same headache as before.”