HSBC Adds Offshore Investment Options
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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.
Questions & Answers
Q.What is the primary benefit of the QDLP scheme for Chinese high-net-worth clients?
What is the primary benefit of the QDLP scheme for Chinese high-net-worth clients?
The QDLP scheme helps these clients to diversify their investments and access overseas opportunities. This can mitigate risks in their overall portfolios and help grow their wealth, especially in uncertain global markets.
Q.Which types of alternative investments are permissible under the QDLP scheme?
Which types of alternative investments are permissible under the QDLP scheme?
The QDLP scheme allows investments in alternative assets such as hedge funds, private equity funds, and real estate investment trusts (REITs). This provides a broader range of options compared to other programmes.
Q.When was the QDLP pilot program initially launched by Chinese authorities?
When was the QDLP pilot program initially launched by Chinese authorities?
China's State Administration of Foreign Exchange launched a QDLP pilot programme in 2013. Since its inception, China has allocated a total quota of $5 billion for these investments.
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