US asset manager closes down Shanghai office

HONG KONG: US asset manager Matthews International Capital Management is closing its Shanghai office, a company statement and a source with direct knowledge says, the latest withdrawal of a foreign money manager amid difficult market conditions.

Other major global financial institutions, such as Morgan Stanley, have trimmed their teams, as the blue-chip CSI300 index sank last month to five-year lows, pummelled by a property-debt crisis and lack of major stimulus.

“Matthews can confirm it made the decision to close its Shanghai office and consolidate its research capabilities within the existing Hong Kong office,” the San Francisco-based firm said last Friday.

But it would stay strongly committed to in-depth fundamental research in China, it added in the statement, while continuing to deliver high-quality client service in Asia.

A source familiar with the matter said the decision was a cost-cutting measure and the firm had fewer than 10 people, mainly market researchers, in the Shanghai office.

The source sought anonymity as he was not authorised to speak to media.

Matthews’ flagship China Fund has lost 22.4% over the past year through Feb 29, underperforming a retreat of 14% by the MSCI China Index, data on its website shows. Bloomberg first reported the move by Matthews last Friday.

The pull-out joins a roster of exits over the past few years in the face of challenges such as a depressed domestic capital market, policy uncertainty and geopolitical tension.

Last October, US mutual fund giant Vanguard Group sold its stake of 49% in a joint venture with Chinese fintech giant Ant Group, after six years in the country.

A few months earlier, smaller American money manager Van Eck terminated a plan to set up a Chinese mutual fund unit because of uncertainties. — Reuters