HSBC Bank (China) Limited has become the first international bank to distribute private trust plans investing in hedge funds for qualified investors in mainland China, providing them with alternative investment options to achieve a more diversified asset allocation.
The private trust plan is issued by China Resources SZITIC Trust Company Limited, and the underlying fund is managed by Pinpoint Private Fund Management Limited. The HSBC Group has had more than 10 years of strategic collaboration with Pinpoint Group globally.
As an alternative asset, hedge funds mainly invest in publicly traded stocks, bonds and financial derivatives, such as futures and options. Compared to traditional securities investment funds, hedge funds adopt more complex investment strategies and techniques, diversifying investors' stock and debt portfolios by utilizing varied strategies beyond traditional investments.
As such, hedge funds are suitable for qualified investors who are experienced and with certain risk tolerance levels. Boston Consulting Group expects alternatives to grow at an annual rate of 9% through 2026, at which point they will represent an estimated 19% of global assets under management.
“The low correlation between alternative and traditional asset classes provides investors with a wide range of risk, return and diversification options with higher flexibility,” notes Ying Wang, head of investment and wealth solutions, wealth and personal banking, at HSBC China. “Institutions and high-net-worth as well as ultra-high-net-worth investors are increasingly interested in alternative assets, especially hedge funds with diversified strategies. Hedge funds can be an effective tool for portfolio diversification, helping investors capture opportunities amid the current market volatility."
“Looking ahead, we shall select and onboard more alternative investment strategies from leading global and local partners to enrich our range of asset management products with investment targets including hedge fund, private equity, private debt and real estate fund,” Wang adds.