Dutch pension fund giant APG Asset Management has just set up operations in Beijing and Shanghai and is recruiting an onshore China fixed income team as part of a major regional buildout, AsianInvestor can reveal.

APG's regional headquarters in Hong Kong established a wholly foreign-owned enterprise in Shanghai on October 16, which in turn set up a Beijing branch on October 28, according to company registration records. These are APG's second and third offices in Asia.

The first member of the China bond desk is already in place, said Wim Hazeleger, APG's Asia chief executive. Gregory Suen joined in Hong Kong on October 2 as head of China fixed income, having been lead China bond fund manager at HSBC Global Asset Management until late September.

Gregory Suen

“He will be responsible for building the team in Hong Kong and mainland China and executing the strategy,” Hazeleger said. “He does not have anyone reporting into him just yet, as we are building the team top down. But we expect to make a number of hires in the coming few weeks.”

Asset owners and managers are increasingly looking to invest directly in China's $13 trillion onshore debt market as it opens up and international index providers move to incorporate it into their benchmarks. For example, Alaska Permanent Fund is making preparations to trade renminbi bonds next year.

But opening local offices and putting fixed income investment staff on the ground in mainland China are pioneering moves even for the largest global asset owners.

CHINA COMMITMENT

APG has thus signalled its commitment to the Chinese market, having also set up a dedicated, high-conviction A-share strategy last year. It is run by a team in Hong Kong in conjunction with Guangzhou-based E Fund Management. 

This level of initiative and regional focus played a big part in APG being named AsianInvestor's International Investor in Asia Pacific for 2019.

Wim Hazeleger

But China is not the firm's only focus. It has €33 billion invested in Asia Pacific out of the €505 billion that it manages globally on behalf of ABP and other Dutch pension schemes.

And APG is fast increasing its regional capabilities across the board. Its Asian investment headcount has grown to 42 from 29 in the past 12 months, Hazeleger said, and it expects to add around 10 more next year.

The Securities and Futures Commission's records in Hong Kong reflect this growth; the number of individuals with licences has nearly doubled to 40 from 22 at the end of 2017.

PRIVATE ASSET DRIVE

APG's headcount has grown mainly on the alternatives asset side, as the firm moves to build up its private markets exposure through direct investment as well as via external managers and co-investments.

Just last month the firm launched a natural resources desk in Hong Kong, with senior portfolio manager Ben Avery coming in as the first hire.   

APG also established a private equity capability in the region this year, hiring Shirley Ma and Stefanie Chan from MetLife Investments in March and August, respectively.

And it brought in Eva Cheng from Invesco in January for the private real estate team, as well as infrastructure specialist Lim ChinChan in February from private equity firm Asia Climate Partners.

On the public markets side, APG has just hired three more* to its emerging market equity desk in Hong Kong: Sue Xu from China Asset Management, Robert Potts from Arisaig Partners and Prashant Periwal from UK pension fund manager USS Investment Management. 

This is after it consolidated its emerging market equity team in Hong Kong at the start of 2019, by relocating the two members of the team in Amsterdam.

* More details on these hires will appear in our people news roundup on Friday.

See the upcoming (Winter 2019) edition of AsianInvestor magazine for an in-depth feature and interview with Wim Hazeleger on APG Asset Management's Asia business and strategy.