China’s Lufax to launch first overseas platform in Singapore

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SINGAPORE (Reuters) – Chinese online wealth management giant Lufax will launch its first overseas platform in Singapore, the company said on Monday, as a more welcoming regulatory environment gave the city state an edge over neighboring Hong Kong.

Competition has been rising among governments across Asia – most notably Hong Kong and Singapore – which have launched a raft of initiatives to grab a slice of the $100 billion invested in financial technology globally.

Besides Hong Kong, Lufax had also considered Australia and the Middle East for its international platform.

Compared with other countries, Singapore was easy to communicate with as the Monetary Authority of Singapore acts as the single regulator for fintech, Chief Executive Officer Gregory Gibb told reporters.

“When you go to other jurisdictions, you will have multiple regulators,” Gibb said.

Chinese insurer Ping An Insurance is the biggest investor in Lufax, which has received approval, in principle, from the Singapore central bank. Lufax plans to make its Lu International platform live in the third quarter.

Gibb said the platform would have three to four products initially that would include simple exchange traded funds and equity products. The company has over 3,000 products in China.

The company is targeting middle-class retail customers, which could initially include Chinese investors with offshore accounts and southeast Asians. However, Singapore residents will not be able to invest on the platform under its current license. Gibb expects an average investment of $50,000 to $100,000 on the platform.

“I would imagine the reach, on the customer side, initially will certainly be Asia. It will start with overseas Chinese and it will extend into the bigger Asian markets,” Gibb said.

Lufax, which is China’s biggest peer-to-peer lending and wealth management platform, will also develop robo-advisory services for the international and Chinese platforms.

Valued at $18.5 billion when it raised $1.2 billion from a group of investors in January 2016, Lufax picked four banks to prepare a Hong Kong initial public offering that could raise $5 billion, sources said last year. Sources had previously said the deal could happen in 2017 or early 2018.

Gibb reiterated that Lufax was ready to go public, but had not fixed a time frame. He said the company had not set a destination for the IPO, but had done a lot of “homework for Hong Kong.”

He said the company was not planning on another round of fundraising before the IPO.