• The " UBS (CN) A&Q China Diversified Fund of Funds " is UBS Asset Management's first onshore Fund of funds (FOF)
  • UBS Asset Management is the first foreign asset manager to launch a fund of private securities funds (FOF) in China

Shanghai, July 15th 2019 – UBS Asset Management today announced that UBS Asset Management (Shanghai) Ltd, its wholly foreign-owned enterprise (WFOE), has launched its first onshore fund of funds (FOF), “UBS (CN) A&Q China Diversified Fund of Funds”, which has been submitted for filling with the Asset Management Association of China (AMAC). UBS Asset Management is the first foreign asset manager to launch a fund of private securities funds (FOF) in China.

Demand for high-quality actively-managed fund products has burgeoned in line with the implementation of the new asset management regulations that call for a shift from guaranteed-return to NAV-based products. But, historically, a large investable universe and high dispersion of returns has been challenging for endinvestors. With the launch of a China onshore fund of hedge funds, investors now have access to an instrument with the potential to defuse systemic risk and enhance investment returns.

UBS Asset Management (Shanghai) Ltd.'s XIA Kun will manage the fund. Xia has 15 years’ capital markets experience, including 5 years managing products onshore.

“The investment strategy, which incorporates a top-down hedge fund strategy allocation and bottom-up manager selection, aims to achieve long-term capital appreciation while maintaining both moderate beta to the China A-share market and moderate volatility over an economic cycle. Diversification is integral to portfolio construction which results in portfolios that blend core and tactical managers to navigate the changing market,” said Xia.

“In addition to evaluating the investment and business acumen among the underlying funds, our investment team continually evaluates operational risks and investment structuring. Hedge funds are highly dynamic and there is extraordinary value in the exit decision,” he added.

“UBS is the world’s second largest fund of hedge funds manager¹, and funds of hedge funds are a flagship investment capability at UBS AM. The private securities fund industry in China is developing rapidly, so it may take time for onshore investors to develop operational risk awareness and for the industry to align itself to the global standards in terms of investor protection. Nonetheless, we hope to realize the full potential of the FOF product model in China,” said Adolfo Oliete, Head of APAC Investments for HFS at UBS Asset Management.

Raymond Yin, Head of Asia Pacific and Head of China onshore at UBS Asset Management, added: “The launch anticipates future demand in the asset management market. The distinct characteristics of the China market and FOF products pose unique challenges for the investment research and execution capabilities of foreign private fund managers. The successful launch of UBS (CN) A&Q China Diversified Fund of Funds attests to the width and depth of UBS AM’s research, execution and distribution capabilities in China."

UBS Asset Management became the first company with both a Private Fund Management (PFM) license and a Qualified Domestic Limited Partner (QDLP) scheme quota in China in July 2017. It released its first onshore private equity fund designed for Chinese investors in 2017.

Media contacts

UBS Asset Management

Joanna Sin, joanna.sin@ubs.com, +852 2971 7950
Fiona Chan, fiona-y.chan@ubs.com, +852 2971 8837

Teneo Strategy

Sherman Ko (Hong Kong), Sherman.Ko@teneostrategy.com, +852 3655 0518
Oscar Wang (Shanghai), Oscar.wang@teneostrategy.com, +86 21 5203 7584

About UBS

UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. UBS' strategy is centered on our leading global wealth management business and our premier universal bank in Switzerland, enhanced by Asset Management and the Investment Bank. The bank focuses on businesses that have a strong competitive position in their targeted markets, are capital efficient, and have an attractive long-term structural growth or profitability outlook.

UBS is present in all major financial centers worldwide. It has offices in 50 countries, with about 31% of its employees working in the Americas, 32% in Switzerland, 19% in the rest of Europe, the Middle East and Africa and 18% in Asia Pacific. UBS Group AG employs approximately 67,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

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1HFM InvestHedge Billion Dollar Club, published March 2019.