M&G targets Chinese investors in Hong Kong venture: Fund manager teams up with local financial group to offer unit trusts

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The Independent Online
M&G, the investment group, is aiming to tap demand for unit trusts and institutional fund management in Hong Kong and China by forming a joint venture with Dah Sing Financial, owner of the fifth-largest locally incorporated bank in Hong Kong.

Agreement has been reached in principle with Dah Sing in what is the first joint venture between a fund management group based in Britain and a local Hong Kong Chinese financial group.

Jardine Fleming is a joint venture between Robert Fleming and Jardine Matheson, while Schroders has a wholly owned fund management operation in Hong Kong.

Control of the venture will be in the hands of Dah Sing, which will hold 51 per cent of the new company, with the rest held by M&G. It is expected that M&G will provide the investment management skills.

Units trust products will initially be aimed at customers of Dah Sing and institutional fund management skills at charities, provident funds and company treasury funds in the region.

Investors in the prospering economic development regions on the south coast of China will also be targeted.

'Asia Pacific is clearly a strong growth area and Hong Kong is an attractive location. If you set up something sensible in Hong Kong today you will have something in China in three years,' David Morgan, managing director of M&G, said. 'Penetration of unit trusts among Hong Kong investors is still a long way behind Britain. It is a very competitive business, very tough and growing fast.'

Mr Morgan said that the unit trusts to be marketed would be based on investments in the Asia Pacific region that matched the preferences of Hong Kong investors.

M&G has been investing in the area since the 1960s and has a number of specialist Asia Pacific trusts available for UK investors. It will second two fund managers intitially to Hong Kong.

The company has known Dah Sing for about three years and is attracted by its connections with China. David Wong, chairman of Dah Sing, comes from a prominent Shanghai family and has associations with the Peoples' Construction Bank, the second- largest bank on the mainland.

Mr Wong controls 40 per cent of Dah Sing, which was founded in 1947 by a group of Shanghai businessmen.

Dah Sing, incorporated in Hong Kong in 1987, is capitalised at the equivalent of pounds 420m on the Hong Kong Stock Exchange and has total assets of pounds 2bn held in 54 bank branches.

This is M&G's second venture overseas.

It entered into an agreement with the US Dreyfus Corporation two years ago and is managing three funds subsequently launched by them.

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