For the last three decades, China has implemented wide-ranging economic reform that has helped open the financial sector. The country is determined to move on from reliance on state-directed loan financing to a system based on more diversified and disciplined credit channels that allows foreign capital to play a greater role in developing its infrastructure and boosting the domestic economy. However, to date, most attempts by international financial services firms to establish a bridgehead in the lucrative Chinese market have come to nothing. Notwithstanding the challenging regulatory environment, UBS is one of only a handful of international firms to turn a profit in China.
Potential too great to ignore
Rob Stewart, Head Communications Asia Pacific, describes the development of UBS’s offering in China as a “learning process,” but with USD 3 trillion in foreign reserves, a steadily rising GDP, and an asset management industry estimated to expand to USD 17 trillion by 2030, the potential of China is too great to ignore.
In 2017, AM was granted a Private Fund Management (PFM) license by the Asset Management Association of China (AMAC) enabling it to offer onshore investment products to institutional and high net worth investors in China via its wholly foreign-owned enterprise (WFOE) UBS Asset Management (Shanghai) Limited.
This is a mark of our continued support of China in its efforts to open its capital markets to the world.René Bühlmann
In November 2017, AM launched the first domestic Equity Private Fund provided by a foreign asset manager in China. This is in addition to the range of products AM already offers through its joint venture UBS SDIC, which has served retail clients in China since 2005. “Securing the license expands the breadth and depth of our domestic offering, complements our offshore capabilities and, importantly, demonstrates our continued support of China in its efforts to open its capital markets to the world,” explains René Bühlmann, Group Managing Director, Head Asia Pacific at Asset Management.
“Asset Management has been serving China investors since the 1990s. With the addition of the PFM license, augmented by our other platforms in China, we can provide services to onshore and global clients. It also allows us to work more closely with subsidiaries of global firms in China to meet their domestic investment needs.”
A key market
UBS is the first international asset manager to hold both a PFM license and a Qualified Domestic Limited Partner (QDLP) scheme quota and, since the launch of the QDLP offering in 2016, AM has helped domestic clients invest in alternative assets offshore. At the same time, the firm has built a foundation on which to further grow its business in China through an ambitious hiring program and the establishment of three UBS University campuses as well as Business Solutions Centers in Shanghai, Wuxi and Beijing. UBS has long identified China as a key market with a business potential too great to be ignored.
Asset Management has been serving China investors since the 1990s. Today, UBS provides services to onshore and global clients.
Sharing a vision
Together with our donors we are working to ensure that every child receives a quality education, healthcare and the right to childhood.
When it comes to education and development, nothing brings the future into focus like having the right resources. Correcting eyesight can boost student learning by the equivalent of an entire extra year of school. However, Stanford University’s Rural Education Action Program (REAP) has found that, for instance, within rural China, only about one in seven children who need glasses actually has them.
UBS covers all administrative costs
Together with donors, our UBS Optimus Foundation supports REAP in their effort to develop a more efficient vision care model throughout China – working to enhance the capabilities of local organizations and incorporate vision care into local governments’ healthcare agendas. And this collaboration has proved successful. We were able to support six vision centers that in turn helped about 15,000 children get the care they needed. In the future, we will continue to work closely with REAP to provide reliable and continuous funding to support services such as screening for more complex disorders and building telemedicine platforms for diagnosis and treatment.
We strive to help our donors see the bigger picture – so they can find the right programs and partners as well as manage their efforts in a transparent way with all administrative costs covered by UBS. Together we bring transformative, sustainable and scalable benefits to those who need them most.