FOF Business Of Domestic Third Party Financial Institutions Began To Explore New Development Path.

The vast majority of domestic FOF market share has been controlled by third party financial institutions. However, with the admission of public FOF, the third party financial institutions will inevitably face the double impact of the loss of customer resources and the intensification of resource competition.

Reporters learned that, in order to ease the impact of FOF, many third party financial institutions either lay out overseas FOF business or pform FOF business to MOM model, thereby finding new blue ocean market.

Chen Jiang told reporters that the public offering of FOF has made many outstanding private equity funds quite exciting.

He had approached a private investment fund with a scale of about 3 billion yuan, and the net revaluation rate was less than 5% during last year's big adjustment period. The net floating rate was only 2.3%. The net value at the end of last year basically returned to the level before the stock market crash.

Based on the good trust relationship accumulated between the two sides, he managed the FOF product to get a subscription of 50 million yuan.

Today, this quantitative investment private placement fund intends to raise a new quantitative investment product, but it can only give him a 30 million yuan subscription amount.

The reason is that the head of the fund management team intends to leave part of the subscription amount to the public offering FOF.

In the eyes of this fund management team leader, if this new product can attract public investment in FOF, it can attract more institutional investors' favor and further expand the scale of fund-raising. On the other hand, the public fund as a contributor is relatively familiar with the fluctuation of the two market, and will not appear blindly redemption because of the large fluctuations in the stock market.

In fact, I have privately persuaded that the relevant provisions of the public offering FOF must invest more than 80% of the assets in the share of the public fund, leaving a very limited amount to private equity funds or non-standard creditor's rights plans, but he still insists on setting aside a portion of the quota and waiting for the FOF capital to be raised.

Chen Jiang recalls.

What he did not expect was that this led to a series of Domino effects.

First of all, some of the high net worth customers are unhappy. The amount of subscription is too low to be changed, and even some of the funds are pferred to public offering.

Looking for better investment opportunities, the next step is to suddenly discover that you need to make some concessions in the performance split.

"In the previous private equity fund products, we distribute the excess profits according to the 20% and 80% allocation, and extract 20% from our side. Now the other party proposes a new product's excess profit margin allocation ratio adjusted to 10% and 90%."

He said he didn't understand it at first, but later he realized that the admission of public offering FOF allowed the private equity fund to have more fund-raising options and naturally had more bargaining power in cooperative negotiations.

Reporters learned that in the early days of the public offering of FOF, the public offering fund was still cautious about the allocation of private equity funds.

A public fund company official said that at present, his fund company mainly adopts the internal purchase method, namely, first invest in different fund types of the fund company (stock, mixed type, bond, currency) public fund product, test whether the existing FOF investment model is effective, and then consider expanding the investment scope to the private equity fund, realizing more diversified asset allocation.

"But we have been concerned about the latest performance fluctuations and the flow of key personnel in many domestic private equity funds."

The public fund company believes that the Chinese fund and Russell investment cooperation, to some extent, for the public FOF investment private equity fund to pave the way.

After all, Russell investment and Ping An Group launched a joint venture, tracking the investment style and performance of the domestic private equity fund for many years, and accumulated a large number of private equity investment income data.

Facing the impact of public offering FOF, the domestic third party financial institutions FOF business began to explore new development path.

Chen Jiang told reporters that in September 23rd, when the SFC issued FOF guidelines on public offering, he began to put FOF business overseas on the agenda.

In his view, the expansion of overseas FOF business is mainly based on two considerations: first, with the increasingly high demand for high net worth group assets in global distribution, overseas FOF is an important product strategy to retain customers; two, the European and American financial market FOF investment varieties are more abundant than domestic FOF, including macro strategy, relative value, event driven, stock long absolute return, short stock, and quantitative strategy. Through the layout of these different strategic fund products, a cross cyclical, cross market, cross asset class portfolio is formed, so that the third party financial machinery FOF business has new competitive advantages.

"We have set up branches in Hongkong, and intend to launch the Global Multi Strategy FOF and quantitative investment strategy FOF by the end of the year. We mainly attract high net worth groups to invest overseas funds first, and wait for the relevant departments to relax the quota of individual overseas investment. We intend to introduce these FOF products into China, and then attract them to invest with RMB funds."

Chen Jiang revealed.

At the same time, many third party financial institutions began to FOF business to MOM

。

The so-called MOM, the Manager of Mangers mode, is a new investment mode that the MOM fund managers choose to carry out their own investment ideas, invest in a stable style and get excess returns through long-term tracking and studying the investment process of fund managers. They are entrusted with investment sub accounts to make them responsible for investment management.

The biggest difference between FOF and MOM is that FOF pays more attention to the influence of fund managers' personal character and investment habits on performance, while the latter pays more attention to the past performance and investment concept of fund products.

In Chen Jiang's view, the MOM mode allows the third party financial institutions to choose a broader range of private equity funds, to some extent, to ease the competitive pressure of obtaining outstanding private equity funds.

"However, the success of pformation is uncertain."

Many private equity sources told reporters.

Usually a mature MOM manager takes a lot of time with a private fund manager to make a long and face-to-face interview to understand the impact of his personality on investment performance, especially in the case of the investment performance.

If his character fluctuates sharply, will his investment lead to a bigger loss.

A third party financial institution official revealed that under the circumstances that they could not grasp the investment characteristics of each private equity fund manager, they did some structured treatment of MOM products, that is, the introduction of inferior / preferred shares, and the MOM product issuers as the poor investors, attracting high net worth investors to invest as a preferred share investor, thereby building an investment safety mat for the latter.

"At present, our bad investment is basically in 10%-15%."

He revealed.

In fact, it also creates a lot of pressure on performance.

Earlier, he inspected nearly 100 domestic private fund managers' personality and trading ability, and found a "1 billion 500 million" watershed phenomenon, that is, many domestic active management private equity assets management scale once exceeded 1 billion 500 million yuan, there will be a certain degree of performance decline.

The main reason is that the investment management ability of fund managers can not keep pace with the scale expansion, resulting in frequent mistakes in stock selection.

Fortunately, many private equity funds have spent the bottleneck period by introducing the quantitative investment mode such as short and short strategy and relative value.