Job losses loom as Vanguard closes Hong Kong, Japan operations

By Samuel Shen, Andrew Galbraith and Scott Murdoch

SHANGHAI, Aug 26 (Reuters) - U.S. asset manager Vanguard Group will close its Hong Kong and Japan operations and cut jobs across both cities as it shifts its Asian headquarters to Shanghai, it said on Wednesday.

The global fund giant, with more than $5 trillion in assets under management, said in a statement its Hong Kong business mostly served institutional clients and not retail investors, which are its primary focus.

Hong Kong is home to Vanguard's main office in Asia after the index fund giant closed its Singapore operation in 2018.

It said the departure from the Asian financial hub would take between six months and two years.

Vanguard, which launched a wholly foreign-owned enterprise (WFOE) in China in May 2017, said the move would see it exit its Hong Kong ETF (exchange-traded fund), mandatory provident fund and index-tracking investment schemes businesses.

The statement said an unspecified number of jobs would be lost as a result of the closure.

Separately, a spokesman said Vanguard would also close in Japan, and shift its primary office in Asia to Shanghai.

A Vanguard spokesman in China declined to say how many jobs would be lost in Hong Kong and Japan.

"Our future focus in Asia is on Mainland China," the spokesman said in an email.

In Hong Kong, Vanguard runs six ETFs that are traded on the city's stock exchange, according to its website.

The best performing of those was the Total China Index ETF, which had gained 15.5% in terms of net asset valuation returns for the year up until July, the website showed.

Vanguard's closure plans were first reported on Wednesday by Ignites Asia, a Financial Times service.

Vanguard announced a China advisory joint venture in December 2019 with China's leading fintech company, now known as Ant Group, to provide retail investment advisory services.

Ant, an affiliate of Alibaba Group Holding Ltd BABA.N, 9988.HK, is targeting a more than $200 billion valuation in a dual listing in Hong Kong and Shanghai and operates Yu'ebao, one of the world's largest money market funds.

(Reporting by Samuel Shen and Andrew Galbraith in Shanghai, Scott Murdoch in Hong Kong and Cheng Leng in Beijing; editing by Jason Neely and Mark Potter)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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