London-based Heptagon capital has teamed up with a Chinese firm to roll out an equity portfolio available to investors in a UCITS structure.

London-based Heptagon Capital has teamed up with a Chinese firm to roll out an equity portfolio available to investors in a UCITS structure.

Heptagon has partnered with Harvest Global Investments, which is part of the Harvest Fund Management Group, a statement from Heptagon said yesterday. It said the fund is the first UCITS vehicle to follow an actively-managed strategy in the China A Shares equity market, which provides for daily liquidity under the RMB Qualified Foreign Institutional Investors programme.

The fund can be seen as an example of how firms are trying to exploit a more liberal regime – or so they hope – that China is creating for foreign investors in its economy, which is the world’s second largest.

Heptagon Capital, with $9 billion in assets under management, is launching the fund on its Irish UCITS platform, where Harvest has been appointed the sub-investment manager. UCITS funds are structures that can be bought and sold across national borders in the European Union bloc.

The Harvest portfolio managers employ what is known as “growth at a reasonable price” approach. This is a bottom-up stock-picking strategy, with a long-term outlook based on the idea of investing in a concentrated portfolio of high conviction stocks that trade in RMB. Unhedged dollar, euro and sterling share classes are also offered by the fund, the firm said in a statement.

“We are now bringing our actively-managed China A Share equity strategy to a wider geographical investor base through our sub-investment manager role for Heptagon’s Irish regulated UCITS fund vehicle,” said Peng Choy, chief executive, Harvest Global Investments.

“This is the first time that an actively managed, well-performing strategy from a leading domestic asset manager in China has been launched for UCITS investors with daily liquidity,” said Fredrik Plyhr, founding partner.

“The China A shares have a far higher weighting than the H shares to sectors like consumer services and consumer goods, which are obviously closely aligned to the often stated, but still very real, domestic consumption theme in China. With the Shanghai composite trading at the cheapest level on record, relative to the MSCI Emerging Markets Index, we feel that the timing of this pioneering product will prove opportune for our all stakeholders,” he added.