Royal Bank of Scotland (RBS) has sold its European exchange traded funds (ETF) business to China Post Global, the international asset management arm of China Post & Capital Fund Management Company.
The deal marks the first time that a Hong Kong asset manager has acquired a European Undertakings for Collective Investments in Transferable Securities (UCITS) ETF umbrella and its investment management team.
The acquisition, which gives China Post Global a foothold in the European market, is described as marking “the first step in its strategy to become a gateway between China and the rest of the world, providing mutual access for investors.”
It will see China Post Global become the promoter and global distributor for the market access ETFs, formerly RBS’s ETFs listed in Frankfurt and Zurich. These invest in commodities, emerging market (EM) and frontier market equities and have assets under management in excess of €360m. Their track records range from five to 10 years.
The existing 10 ETFs will be cross-listed in Hong Kong and China Post Global says that they “will be seeded with additional capital to make them more attractive to institutional investors”, while “innovative new funds” are added.
The company already plans to launch later this year the first ever smart beta ETFs in Europe investing in Chinese securities. China Post Global will also target extensive distribution in mainland China.
“This acquisition demonstrates China Post Global’s long term commitment to the European region,” said Danny Dolan, managing director of China Post Global (UK). “Our aim is to differentiate ourselves through innovation.
“For example, while ETFs giving exposure to China and smart beta strategies already exist, no-one in Europe has yet combined the two. Other differentiators for us include our access quotas to mainland Chinese securities, the strength of our parent companies and their distribution networks, and the strong financial engineering background of our team, which will help with product construction.”
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