Edmond de Rothschild Asset Management Hong Kong Ltd

UPDATE 1-Rothschild Asset starts HK ops, group eyes China

Tue Jun 10, 2008 6:51am EDT

(Wraps in comments from media conference, plans for China private equity fund)

By Jeffrey Hodgson

HONG KONG, June 10 (Reuters) - Edmond de Rothschild Asset Management opened its Hong Kong office, joining a growing number of European firms expanding into the high-growth region even as global financial markets weaken.

The 12 billion euro ($18.69 billion) fund manager's parent, closely held French bank La Compagnie Financiere Edmond de Rothschild Banque, is also working to raise 200 million to 300 million euros for a China-focused private equity fund, executives said on Tuesday.

Both moves are aimed at giving the asset management and private banking group, controlled by a branch of the storied Rothschild family, exposure to the booming Asian market.

"We believe that if we want to keep a 20 percent growth rate (in assets under management), we have to be in Asia and specifically in China ... the centre of the financial world is going to become China," Michel Cicurel, chairman of LCF Edmond de Rothschild Banque's executive board, told a new conference in Hong Kong.

He said the new private equity fund would focus on small- and mid-cap Chinese firms.

"We started the marketing of this fund three or four days ago, so I will tell you more about it in October," he added.

LCF Edmond de Rothschild Banque managed about 30 billion euros in assets under management at the end of last year. It is the French arm of LCF Rothschild Group, which manages more than 100 billion euros and is controlled by Baron Benjamin de Rothschild.

CROWDED ASIAN MARKET

Edmond de Rothschild Asset Management said it would use the Hong Kong office as a research base for its existing funds, with a team of money managers and analysts led by deputy chief investment officer Yi Tang.

It will also be looking to distribute its funds in the region, including clones of its existing French products. The fund manager said it had been managing Asia equities since 1993 with a focus on China.

Cicurel acknowledged the firm was entering a crowded market, but said many of its funds were top performers, which should stand out.

Executives pointed to the 277 million euro Saint-Honore Chine fund <0#frm-rotcp.lp>LIPPER, which they said had on average outperformed its benchmark by 12.6 percent since inception.

Paris-based Cicurel confirmed a report the bank had agreed to buy a 15 percent stake in Chinese fund house Zhonghai Fund Management Co. But he said the deal was still awaiting regulatory approval and would not confirm the price paid.

Beyond the Zhonghai deal, he said the bank had little interest in expanding through acquisitions.

"We don't need to buy. We've got the reputation, the name, the performance ... and very good teams," he said.

He also said a report that the group was looking to sell a stake to a large Chinese or Indian investor was unfounded.

He noted LCF Edmond de Rothschild Banque is about 80 percent owned by the Rothschild family, with the remainder held by management and Canadian pension fund manager Caisse de depot et placement du Quebec. He said none of the investors was looking to sell.

Edmond de Rothschild Asset Management joins a growing number of international fund houses crowding into the high growth region.

UK fund house Threadneedle, a unit of Minneapolis-based Ameriprise Financial Inc (AMP.N), said late last month it had launched operations in Asia, where it will face established competitors like BlackRock (BLK.N), UBS AG (UBSN.VX), Schroders Plc (SDR.L) and JPMorgan Chase & Co (JPM.N).

F&C Asset Management (FCAM.L), one of Europe's largest institutional money managers, also said earlier this month that it had opened its first Asian office in Hong Kong. ($1=.6419 Euro) (Editing by Mathew Veedon)

Edmond de Rothschild opens Hong Kong operations

The Asset Jun-2008 By Chito Santiago

Edmond de Rothschild Asset Management announced on June 10 2008 the official launch of its Hong Kong operations as the company seeks to be closer to the Asian market and develop a strong client base in he region.

The company, a wholly-owned asset management subsidiary of La Compagnie Financière Edmond de Rothschild Banque, recently received a licence from the Hong Kong Securities and Futures Commission for asset management and for dealing in securities with professional investors.

“We are extremely pleased to expand our group’s footprint in this important region, where we are already actively managing funds,” says Michel Cicurel, chairman of the executive board of La Compagnie Financière Edmond de Rothschild Banque. “We are optimistic about the growth in the region and are excited to contribute to its success.”

Edmond de Rothschild Asset Management has a long tradition of fund management in Asia and has been managing equities in the region, with a focus on China, since 1993 when it launched its Saint-Honoré Asie Opportunités Fund. It further accelerated the growth of its Asia fund range with the launch of the Saint-Honoré ChinAgora Fund in 2006, investing in mainland A-shares, after the group was granted a QFII (Qualified Foreign Institutional Investor) licence.

“Being located in Hong Kong will give our team an even deeper knowledge and understanding of the Asian markets, especially small and mid-cap companies, a strong source of added-value in our stock-picking philosophy,” says Philippe Couvrecelle, chairman of the executive board of Edmond de Rothschild Asset Management. “We wish our licence may enable us to offer our clients funds that are established under the local regulations, including clones of our French products, such as Saint-Honoré Chine.”

La Compagnie Financière Edmond de Rothschild Banque opened its first Asian banking representative office in Shanghai in 2006. One of its first achievements was to obtain a QFII licence, making it the first private bank to invest in A-shares listed on the Shanghai and Shenzhen stock exchanges. Since then, the group’s assets under management in Asia, including China equities, have grown in excess of 2 billion renminbi (US$3.12 billion). – CS

Following is the speech by the Financial Secretary, Mr John C Tsang, at the opening reception of Edmond de Rothschild Asset Management today (June 10):

Mr (Michel) Cicurel, Distinguished Guests, Ladies and Gentlemen,

Good evening.

It gives me great pleasure to join you at this cocktail today. My warmest congratulations to Edmond de Rothschild Asset Management on its official launch in Hong Kong.

Financial institutions from France have been contributing to the development of Hong Kong's financial services sector over the years. With the opening of Edmond de Rothschild Asset Management, there are now altogether 26 French-controlled financial institutions licensed by the Securities and Futures Commission in Hong Kong.

Rothschild is a legendary institution. It represents the tale of a highly successful family business that has served the French financial community for more than two centuries. Its commitment to innovation and high-quality investment products has stood the test of time. Your presence adds to the vitality of our financial community here in Hong Kong as well as highlights our credentials as an international financial centre.

Indeed, Hong Kong has consistently been an attractive location for conducting asset management business. Over the years, the size of our combined fund management business has grown to some US$800 billion, over 60% of which was sourced from overseas investors. In 2007, the fund sales in Hong Kong reached a record high, amounting to some US$46 billion (Note 1).

The prospect of the asset management industry in Asia is promising, to say the least. The World Wealth Report 2007 published by Merrill Lynch and Capgemini expects the wealth of high net worth individuals in Asia to grow from US$8.4 trillion in 2006 to US$12.7 trillion in 2011, an increase of some 50% in a period of five years. In particular, Mainland China's strong and sustained economic growth has resulted in rapid accumulation of wealth and a fast developing middle class, leading to higher demand for higher-end and more sophisticated financial products.

As an international financial centre situated at the heart of Asia and the doorstep of Mainland China, Hong Kong is well-positioned to capture the opportunities in the ever-growing asset management business in the region, and even more so since our abolition of estate duties and exemption of profits tax from offshore funds in 2006.

By setting up shop in Hong Kong, you will have the support of a deep pool of talent and a world-class regulatory environment, which are all-important, especially when you are embarking on a new venture in a new environment. And I shall not repeat all the home comforts you would expect to find in Asia's World City, such as world-class telecommunications and transport systems, good food and shopping brands from every corner of the globe, a safe living environment for your families and high quality international schools for your children.

Ladies and Gentlemen, I am sure that many business opportunities are already waiting at your doorstep, and so I wish you every success in Hong Kong.

Thank you.

(Note 1) according to statistics compiled by the Hong Kong Investment Funds Association
Ends/Tuesday, June 10, 2008
Issued at HKT 19:02

Bank of China to buy 20% stake in Edmond De Rothschild

(Agencies)

Updated: 2008-09-19 11:25

Bank of China Ltd, the nation's third-largest by value, will buy a 20 percent stake in La Compagnie Financiere Edmond De Rothschild for 236 million euros ($342 million) to start an asset-management venture.

Compagnie Financiere Edmond de Rothschild, the French fund-management unit of privately-held bank LCF Rothschild Group, and Beijing-based Bank of China will begin an asset-management and private-banking venture to sell Rothschild's financial products through the 10,800 branches of the Chinese lender, according to a statement released on Thursday.

"Chinese banks are performing in a marvelous way in the current maelstrom that is shaking the global finance," Compagnie Financiere Edmond de Rothschild Chairman Michel Cicurel said at a press conference in Paris.

"Bank of China is perfectly positioned to accompany China's growing middle class" as the lender has more than 20 million accounts of individuals with at least $100,000, Cicurel said.

Compagnie Financiere Edmond de Rothschild "had no need for cash" as it completed the deal, Cicurel said. Bank of China is buying a 10 percent stake from Caisse de Depot et Placement du Quebec, a Canadian pension fund, and the rest will consist in new shares, Cicurel said.

Benjamin de Rothschild, chairman of the supervisory board, will keep a 75 percent stake in LCF Edmond de Rothschild and Bank of China will be the second-largest shareholder in the asset-management company, according to the statement. The firm managed 29.6 billion euros in assets at the end of 2007.

Further Opportunities

Bank of China "expects that the transaction will provide a reasonable return on investment," the Chinese lender said in a statement to Hong Kong's stock exchange on Thursday. "The bank can further explore opportunities in European and other emerging markets."

Bank of China Vice President Zhu Min also said the company isn't ready to acquire a major US investment bank.

While "very volatile markets present opportunities to buy others, I don't think we have the capability to do that today," Zhu told reporters in Paris.

The bank is still looking at its domestic market for expansion and to increase its competitiveness there, he added.

Compagnie Financiere Edmond de Rothschild, which started operations in Shanghai two years ago, is among the latest international fund managers to start operations in the country to tap growing personal incomes and sovereign wealth funds.

Almost 2,000 funds authorized for sale to individuals managed over $910 billion in assets in Hong Kong by March 2007, according to information from the Hong Kong Investment Funds Association.