Nomura establishes joint QFLP fund in Shenzhen

Nomura views JV as key entry point into Chinese market

Japan’s Nomura Asset Management has teamed up with Shenzhen Hua Xia Ren He Capital Management to establish a joint venture to conduct a private fund business in the Qianhai economic zone in Shenzhen, in Southern China, the firm announced on Thursday.

License to sponsor and manage the Qualified Foreign Limited Partner (QFLP) fund was granted to the joint venture by the city of Shenzhen. The QFLP program, launched in Shanghai in 2011 and then replicated across China, allows participants to avoid extensive regulatory approval processes and currency conversion when investing in RMB-denominated funds.

President of Shenzhen Hua Xia Ren He Capital Management, Jin Weichun, will be heading the JV, and there will be four board members, appointed by Nomura and Hua Xia Ren He on a 50-50 basis, a Nomura spokeswoman told Private Equity International. Jin was formerly the head of the private equity division at state-owned insurer PICC.

The spokeswoman said the JV will begin with a minimal number of employees, which will increase as the business grows.

The JV, which has RMB 13 million ($2 million) in capital, will invest in funds based in China. According to Nomura’s statement, it will target high net worth individuals and institutional investors in China, as well as providing investment strategies to foreign investors through the QFLP framework.

Nomura said it sees the joint venture as a “key entry point” into the growing Chinese market, and it is aiming to enhance its presence and develop new businesses within the country. The Nomura spokeswoman said the firm is partnering with Hua Xia Ren He because of its “very impressive track record and experience in the private equity space” in China.