Giving fintech Chinese touch

CreditEase looks to expand its footprint with products for wealth management

Amid a boom in the global wealth management sector, CreditEase Company, the Beijing-based financial technology conglomerate, is ramping up efforts to expand its presence in overseas markets.

The process started in 2015, when CreditEase successfully listed its online consumer finance and wealth management subsidiary, Yirendai, on the New York Stock Exchange, becoming China's first listed financial technology or fintech company in the global market.

Recently, CreditEase's sub-brand CreditEase FinTech Investment Fund, a venture fund investing in growth-stage fintech companies, was named among the 2017 Most Active FinTech Investors by FT Partners, an investment banking firm based in San Francisco.

In recent months, Credit-Ease FinTech Investment Fund had been investing in fintech companies at nearly one firm per month.

Established in February 2016, the fund has an equivalent of $1 billion in total committed capital. Up to now, it has invested in 24 fintech companies, covering the areas of lending, payment, personal finance, wealth management, enterprise solutions and insurance.

By the third quarter of 2017, a total of 13 firms, invested by CreditEase, ranked among the "Fintech 250" list released by US-based venture capital database CB Insights, and the figure has been rising ever since.

CreditEase attributes its success so far to its international team of veteran financial professionals who work across different time zones every day.

Usually around 8 am in Beijing, its multinational team starts its work day with focus on communication. "Geographical separation and time differences won't be a barrier, and every member within the team, no matter where he is, is able to communicate with each other every day," said Cong Yu, a managing partner of the fund.

"We make decisions in a short period of time. It takes us two to four weeks from getting to know a case, to doing relevant research, and finally deciding whether to invest in the case or not," said Cong.

"A global footprint is the company's goal. The company's two major businesses are inclusive finance and wealth management, and all of our businesses under wealth management are involved in overseas markets," said Tang Ning, founder and chief executive officer of CreditEase.

Its overseas businesses include immigration, house purchases, education, tax planning, internship recommendation, legal service referral, insurance, short-term study, family trusts.

"We have been working on consumers' overseas life service for several years, and the overseas investment sector is also the company's target," said Tang.

In April 2017, CreditEase was recognized as a registered investment advisor by the US Securities and Exchange Commission, marking its foray into the US' wealth management market.

It has expanded its overseas business across numerous countries and regions, such as the United States, the United Kingdom, Australia, Singapore, Israel, Portugal and Germany.

"We value the expertise CreditEase owns in fintech innovation. Many new technologies, such as cross-border payment, and block chain, are still at infancy stage. I am sure there is huge market potential lying in the sector," said Xiong Xiaoge, global chairman of IDG whose venture capital arm IDG Capital formed a comprehensive strategic partnership with CreditEase in 2017.

"Besides, the company possesses numerous talents in the field, which is another reason why we choose to team up with CreditEase," Xiong said.

Apart from IDG Capital, CreditEase has joined hands with various international partners, such as Wellington Financial Limited, Credit Agricole, Tishman Speyer and Blackstone Group.

On March 21, CreditEase signed a strategic cooperation agreement with Amundi Asset Management, the largest asset manager by assets in Europe, in Beijing. This deal made CreditEase the first cooperative partner of Amundi in China in the asset management industry.

Chen Zhichao, chief investment officer at Tishman Speyer China, said, "CreditEase has left us with the impression of 'strictness'. For all the overseas cases we partnered with CreditEase, the company conducted highly responsible due diligence from the very beginning.

"The company doesn't blindly trust so-called experts. Instead, it makes its own judgments from both commercial and market perspectives, which offers deep insights with a global vision."

Apart from assisting overseas companies, CreditEase offers help to Chinese investors to manage their wealth in overseas markets. Good Hope Investment Services Ltd, a sub brand under Creditease Wealth Management, works closely with Chinese high net-worth migrants to develop personalized wealth management, investment, tax planning, insurance, immigration and lifestyle solutions.

The company offers clients institutional advice on a range of issues, provided by a talented team of international professionals with local expertise. Now, the sub brand manages over $1 billion US and European investment assets.

"As global asset allocation has been booming in recent years, many of our customers immigrate through investment. Our concept is to endow immigration with more financial investment attributes. Apart from letting consumers get an identity, I wish to use my investment experience to help them gain more returns on investment," said Jenny Zhan, general manager of Good Hope.

Song Li, 54, a Chinese client of Good Hope whose son, aged 23, studies for MBA medical engineering accountancy in Miami, Florida, considered an immigration-oriented investment programs two years ago. "On accepting the case, the consultant team handed in the application within a month, and 10 months later, our whole family were granted the initial approval issued by the USCIS (US Citizenship and Immigration Services). We are confident that Good Hope would bring satisfying investment benefits to us," said Song.

With the market booming, not only consumers but foreign partners of CreditEase are confident about the company's business overseas. "China's wealth management industry is at a turning point. Asset allocation will also undergo structural changes. With the market opening up further, there will be more new investment opportunities and more possibilities of asset management," said Richard Williamson, managing director of the offshore business for CreditEase Wealth Management.

He said China's wealth management market is becoming complete as well as individual-oriented. "The global market potential for consultants and extended services is huge," said Williamson.