Fidelity eyes expansion of private-asset capability in Asia
Genevieve Cua
A GROWING appetite for private-market investments in Asia has persuaded Fidelity International to expand its efforts to grow its private-asset capability in the region – first, in terms of distribution, and later, potentially in asset management.
Rajeev Mittal, Fidelity International managing director (Asia-Pacific ex-Japan), said: “There’s a growing demand for private assets, particularly in the institutional space, but increasingly also in the wealth segment. We’ve been building up our private-asset (business) in the last three to four years.
“We don’t have direct Asian capability in the private-market space. But we think that that will be a natural extension in due course… We’re bringing our global capabilities into the market here.”
Fidelity manages a total of US$728.6 billion in client assets, comprising US$524.9 billion in asset management and another US$203.7 billion in assets under administration. Asia accounts for a third of the asset management, which is invested mostly in public markets. It has declined to specify the share of private-market assets, which comprise real estate and private credit.
The firm has two other areas of focus in Asia – expansion in China and more broadly, digital distribution and digital assets.
In China, the firm has just concluded a three-week launch of an equity fund, where it raised over one billion yuan (S$192.4 million). Mittal said: “This was the third-largest IPO (initial public offer) fundraising for an equity fund in China since the start of 2022. The onshore China market is highly competitive, and it will not be easy to succeed with over 10,000 funds. But we (aim) to be a top-20 player in mainland China in the coming years.”
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Fidelity secured its mutual fund operating licence in China last year.
According to Nikkei Asia, China’s asset management industry grew by 5.34 per cent to 28.81 trillion yuan last year, the slowest pace since 2013. It reports that fundraising has remained challenging this year.
Mittal says Fidelity’s China equity fund attracted around 27,000 individual investors, of whom 30 per cent subscribed via online channels, accounting for around 10 per cent of assets raised. For the launch, the firm hosted 30 live-stream events, featuring portfolio managers and investment directors. Each event attracted roughly 100,000 individuals. “The reach is incredible, and we’re learning from the process as well,” he said.
The firm was recently appointed by Krungthai Bank as a product and services partner to enhance the bank’s wealth management capabilities.
In terms of digital assets, Fidelity launched a Bitcoin exchange traded product (ETP) last year in Hong Kong, in response to growing interest from professional investors looking to gain access to cryptocurrencies. The ETP is physically backed by Bitcoin and was the first of its kind to be made available in Hong Kong.
The firm also took part in Hong Kong’s HK$800 million (S$136.3 million) tokenised green bond issue in February, the first by a government globally. “We will continue to onboard digital assets as relevant within our portfolios, and we’re examining tokenisation of mutual funds to expand our distribution channels in the region.”
It is also looking into the inclusion of Ethereum in its trading and custodian services for institutional investors.
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