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Fidelity to launch China Special Situations

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Fidelity International is to launch Fidelity China Special Situations, a closed-ended investment company which will make an application to list on the Official List of the UK Listing Authority and to be admitted to trading on the main market of the London Stock Exchange.

The company, which is targeting an initial capital raising of around GBP630m, will invest in a diversified portfolio consisting primarily of securities issued by companies listed in China or Hong Kong and Chinese companies listed elsewhere.

Anthony Bolton (pictured) will manage the portfolio using his contrarian approach to investing to achieve the objective of long-term growth. He will be supported by Fidelity’s Asian investment team.

Shares in the company will be issued at GBP1 and made available through a public offer for subscription in the UK and a placing in certain overseas jurisdictions.

Fidelity China Special Situations shares will be eligible for Isa investments and applications may be made via the Fidelity Isa for either or both of the current and next tax years.

Cenkos Securities will act as sole UK sponsor, broker and bookrunner to the company.

Bolton says: “I am very confident that there will be very many stock-picking opportunities in China in the years to come. I see many similarities with investing in Europe in the early part of my career. Then, my longer-term, research-led approach was considered unusual in a market more used to short-term trading but it proved to be successful. I think the same will be the case in China and I expect that my experience in Europe will be helpful as I see the composition of the market shifting from an emphasis on manufacturing and financials to include more service-oriented companies.”

Charlie Ricketts, head of the Cenkos’ investment companies team, says: “This is an exciting launch for the investment companies sector in general and in particular for Cenkos Securities as broker to the new company. The closed-end structure was selected after careful consideration of China’s market characteristics. A stable asset pool considerably helps management of liquidity and volatility, and ensures maximum flexibility for a portfolio which is expected to include small and mid cap companies as well as those listed on local Chinese exchanges.”

Fidelity opened its Hong Kong office in 1981 and set up a representative office in China in 2004, now located in Beijing. The company has more than 16 years’ experience of investing in China.

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