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The bank has become the first international bank in China to roll out Qualified Domestic Limited Partnership (QDLP) investments.
HSBC is expanding overseas investment options for its Chinese high-net-worth (HNW) clients under a partnership with China International Fund Management – 51 percent-owned by J.P. Morgan Asset Management – to distribute asset management plans investing in QDLP, the bank announced on Tuesday.
The QDLP scheme facilitates investments in offshore traditional and alternative investments by allowing qualified foreign asset managers to raise money in Chinese currency from a qualified individual and institutional investors in mainland China to invest in alternative assets abroad.
This new scheme will help clients diversify their investments and leverage overseas opportunities to mitigate risks in their overall portfolio and further grow their wealth, especially amid uncertainty in the global markets, Richard Li, executive vice president and head of wealth and personal banking, HSBC China, said.
Unlike the Qualified Foreign Institutional Investors (QDII) program, QDLP can direct Chinese domestic investors’ funds to overseas markets and allow investments in alternative assets, including hedge funds, private equity funds, and real estate investment trusts (REITs).
A QDLP pilot was launched by China’s State Administration of Foreign Exchange in 2013. Since its launch, China has granted a total of $5 billion in quotas.
