GLOBAL - German asset manager Union Investment has teamed up with Hong Kong-based Bank of East Asia (BEA) to launch a new fund venture for the Chinese market. Financial terms were not disclosed.

BEA is to own 51% of the venture, named BEA Union Investment, with Union holding the other 49% stake. The venture's funds will be targeted at both retail and institutional clients in China.

According to the partners, the number of distribution offices operated by BEA Union Investment in China will increase to 40 from 28 currently. BEA also operates 120 offices in Hong Kong itself.

"We know that Asia and in particular China is a growth market and that's why we want to participate," said Rüdiger Ginsberg, chief executive of Union Investment.

Ginsberg cited statistics showing that over the next decade, the Chinese and Hong Kong fund markets would grow by 30% and 20%, respectively.

Union and BEA also said the venture's asset management and research team would be based in Hong Kong. Currently, Union invests in Asian equities (ex-Japan) from its home base in Frankfurt, but that is to be transferred to Hong Kong.

Two Union board executives, including Ulrich Köhne and Alexander Schindler, head of institutional business, will also join the supervisory board of BEA Union Investment.

Union is the asset manager for Germany's co-operative banks sector. It currently has €160bn under management for private and institutional investors. BEA's balance sheet assets total €28bn.

Separately, Paul Achleitner, chief financial officer of German insurance giant, has called for stricter disclosure requirements for hedge funds and private equity firms when they invest in shares.

"Each quoted firm has a right to know who its shareholders are. However, current notification requirements are insufficient. Tightening those requirements would have a better chance of success than directly regulating these investors," Achleitner said in Frankfurt last Friday.

Achleitner's comments came a day before a meeting of senior EU financial officials in Berlin. Speaking after the meeting, German finance minister Peer Steinbrück said EU member states were in agreement that there had to be more transparency from hedge funds.

In early February, finance ministers and central bankers from the G-7 industrial nations decided against any further regulation of hedge funds but said they would remain "vigilant" in scrutinising the risks funds presented. 

Topics