HSBC becomes the first international bank to distribute trust plans investing in hedge funds in mainland China
Enabling multi-asset allocation to diverge impact of market volatility.
HSBC Bank (China) Limited (“HSBC China”) has announced the official distribution of private trust plans investing in hedge funds (onshore access fund) to its private banking clients, providing eligible investors with alternative investment options to achieve a more diversified asset allocation. HSBC is the first international bank in mainland China to distribute such plans to qualified investors, further expanding the scope of the bank’s wealth offerings.
As an alternative asset, hedge funds mainly invest in publicly traded stocks, bonds and financial derivatives, such as futures and options. Compared to traditional securities investment funds, hedge funds adopt more complex investment strategies and techniques, diversifying investors' stock and debt portfolios by utilising varied strategies beyond traditional investments. Therefore, hedge funds are suitable for qualified investors who are experienced and with certain risk tolerance levels. Boston Consulting Group expects alternatives to grow at an annual rate of 9% through 2026, at which point they will represent an estimated 19% of global assets under management.
Ying Wang, Head of Investment and Wealth Solutions, Wealth and Personal Banking, HSBC China, said: “The low correlation between alternative and traditional asset classes provides investors with a wide range of risk, return and diversification options with higher flexibility. Institutions and high-net-worth as well as ultra-high-net-worth investors are increasingly interested in alternative assets, especially hedge funds with diversified strategies. Hedge funds can be an effective tool for portfolio diversification, helping investors capture opportunities amid the current market volatility. Looking ahead, we shall select and onboard more alternative investment strategies from leading global and local partners to enrich our range of asset management products with investment targets including hedge fund, private equity, private debt and real estate fund.”
The newly launched private trust plan is issued by China Resources SZITIC Trust Company Limited, and the underlying fund is managed by Pinpoint Private Fund Management Limited. The HSBC Group has had more than 10 years of strategic collaboration with Pinpoint Group globally.
Jackie Mau, Head of Global Private Banking, HSBC China, said: “The deployment of alternative strategies is the latest step in enhancing our differentiated service capabilities since we launched a new model for our global private banking business in mainland China in the first half of the year. As high-net–worth and ultra-high-net-worth clients become more mature in their asset allocation approach, we expect their demand for alternative assets to grow. As the wealth management industry in China develops, alternative assets, including hedge funds, can further enhance the diversified asset allocation capabilities of foreign wealth managers. We will continue to see in-depth cooperation between foreign banks and asset management institutions in more areas, continuing to meet the need for a more diverse range of investment solutions.”
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