(Yicai Global) July 12 -- PIMCO, an American fixed-income asset manager that has a track record of over two decades in China, intends to continue expanding its footprint in the Asian country amid Chinese investors' widening interest to buy overseas bonds.

"There is no way in my view that you can think of the asset management industry five, 10, and 20 years down the road without thinking of China," Alec Kersman, managing director and head of Asia Pacific at the California-headquartered company, said to Yicai Global in an interview recently.

In June, PIMCO opened its new China office in Shanghai Tower and said it would continue to expand its staff. PIMCO currently has a global asset management scale of USD1.8 trillion. In China, it mainly issues qualified domestic limited partner products which allow mainland-based investors to allocate funds to overseas products, a more conservative option for foreign-funded investment managers in China than setting up public funds.

Chinese investors are increasingly keen to diversify. Since the fourth quarter of last year, domestic institutions, including public funds and wealth management subsidiaries, have been very interested in overseas bond markets due to the high-interest rates and the expected rate cuts.

PIMCO established a wholly foreign-owned enterprise in the mainland in 2019 and joined the QDLP program to raise funds. However, so far PIMCO has not revealed any license applications to start public funds or joint ventures in wealth management.

At present, Shanghai, Beijing, Tianjin, Hainan and other places are promoting QDLP projects, a person from another foreign asset management institution told Yicai Global. However, due to the fierce competition with local firms, foreign asset managers who are familiar with public placement must start with private placements in China, exacerbating the challenges as many issuances of securities to select investors instead of the whole market do not do well, the source added.

Shanghai piloted the QDLP scheme in 2013. The fundraising threshold is generally over CNY1 million (USD138,700) so the program targets financial institutions and high-net-worth individuals.

Editor: Emmi Laine