Australian investment manager AMP Capital has decided to wind up its China Growth Fund (AGF) by liquidating the fund.
AMP Capital opted for an upfront sell-down option for the portfolio, under which it plans to sell down the entire portfolio "as soon as practicable," hold the proceeds in US dollars in a bank account in China, and distribute it to unitholders after securing tax and regulatory approvals.
AMP Capital Funds Management chairman Adam Tindall said: "We have decided that the best approach is an ‘upfront sell-down option’ where all of the underlying portfolio of China A shares is sold (other than shares that are suspended or in trading halt), and then the net proceeds are distributed in tranches as soon as tax and regulatory approvals are received by the Chinese authorities.
"We believe this strategy is fair and reasonable to all unitholders and provides for an efficient and economic pathway to completion of the wind-up in the shortest possible timeframe and provides more certainty to unitholders."
The company will also make an initial distribution of about $40m in profits and cash to unitholders prior to the end of September 2016.
In the next three months, a sum of $305m of AGF's principal would be repatriated.
The management fee within AGF would be lowered to 0.4% from 1.35%, with effect from 1 September 2016.