The Hong Kong business of the US-listed Shanghai-based wealth management firm was opened in October last year. “Our target is to raise RMB 6bn ($900m) for offshore products in the first year,” Zhou told FSA.
Jupai had RMB 21.4bn of assets under advisory as of March 31, while its Hong Kong unit caters to the overseas allocation needs of its high net worth clients in China who already have offshore US dollar assets.
“The trend of overseas asset allocation is very obvious. It is not only due to a depreciating yuan, but also a natural evolution for mainland investors to enrich the allocation of assets by having more non-renminbi investments,” Zhou said.
Real asset preference
At the moment, real estate and quantitative hedge funds are favoured by investors, he noted.
“The volatile period is expected to last for quite some time, while ‘black swan’ events could still happen. Hence we recommend investments that are relatively conservative, for instance hard assets like real estate.”
"The trend of overseas asset allocation is very obvious. It is not only due to a depreciating yuan, but also a natural evolution for mainland investors to enrich the allocation of assets by having more non-renminbi investments"
He said the UK market might present an opportunity, despite the fact that Standard Life Investments, Aviva Investors and M&G Investments this week suspended trading in the shares of their property funds, sister publication Portfolio Adviser reported.
“One can consider investing in the UK property markets now. The country is set to face some challenges after Brexit, but it is still among one of the biggest economies in the world.
“UK house prices are likely to find a balancing point soon,” he said.
Returns on real estate remain at 5-7%, he said, which is “lower than the onshore [real estate] markets, but offer more secured and stable returns”.
“The gap between onshore and offshore investment returns are also getting smaller,” he added.
Jupai is also planning to introduce a mutual fund platform that will include “the most well known firms” such as Blackrock and Vanguard at the first stage. “The brands give a sense of security for these individual investors.”
Apart from distributing products, the firm hopes to launch its own investment products later this year in the SAR – one is related to US car loans, and the other is private placement of public debts in Hong Kong.