Exclusive-China's Harvest Fund cuts Hong Kong staff in pullback from offshore business, sources say
By Xie Yu and Selena Li
HONG KONG (Reuters) — Harvest Fund Management, which manages $210 billion in assets, has laid off more than one-third of its staff at its Hong Kong unit as the leading Chinese asset manager pulls back from foreign business, two sources with knowledge of the matter said.
The impacted staff at the Hong Kong unit, Harvest Global Investment (HGI), received notices this week to leave the firm within three months, the sources said, in a move that comes as foreign investors' appetite for Chinese stocks remain weak.
HGI, with about 40 employees based in Hong Kong, is the main offshore operation of Harvest Fund — a China joint venture in which Deutsche Bank's asset management arm DWS currently owns 30% stake.
The layoff came after HGI saw foreign capital inflows drying up, said the sources. The unit will gradually wind down most of its retail funds domiciled in Hong Kong and Europe, only keeping an outbound investment function for Chinese clients, they added.
The development underscores the challenges Chinese asset managers are facing, as foreign capital inflows diminish and the country grapples with a slowing economy amid a protracted crisis in the property sector and local government debt travails.
The $3.8 trillion mutual fund industry in China is also reeling from shrinking margins amid sluggish sales and Beijing's call to cut fees.
A third source with knowledge of the matter said that the HGI layoffs was part of the asset manager's strategy overhaul that would transfer most of the functions of serving foreign clients from Hong Kong to Beijing.
Harvest is one of the first Chinese asset managers to make sizable layoffs in Hong Kong in recent years.
The asset manager's job cuts in Hong Kong add to
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