The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Wat joins Atlantis from Deutsche Asset Management and has more than 16 years experience as a manager of Asia ex-Japan investments. Before joining Deutsche Asset Management in 2004, he was an associate director at Invesco Asset Management, where he managed the Invesco GT Asean Fund.
Wat reports to Tony Jordan, London-based co-chairman of Atlantis Investment Management and manager of the Atlantis Asian Recovery Fund.
ôAs an Asian equity specialist we are dedicated to providing investors a range of funds that invest in the region and believe an Asean fund will be an exciting addition to our range,ö says Jordan.
Wat notes that the Asean region has been plagued by political turmoil and high inflation, resulting in a higher risk premium for equities, but he sees this as an opportunity.
ôTo invest in the Asean region, you need to have a contrarian view when things are at their worst,ö Wat says. ôCorporate financial leverage is at its lowest in a decade and valuations are now very attractive.ö
Atlantis believes that Indonesia and the Philippines are markets that stand out in the region.
ôIndonesia is rich in natural resources and the government has been very decisive in implementing credible policies over the past two years. The Philippines, on the other hand, has been unfairly battered due to its small market capitalisation and lack of liquidity. Singapore should also do well, where you are buying developed market risk at emerging market prices,ö Wat says.
One of the key risks in investing in Asean is political instability, says Wat, who qualifies that political instability can be transient, as in the case of Indonesia.
ôAsean markets are small compared to other developing Asian nations. Because of liquidity, markets tend overshoot on the extremes,ö Wat says.
To mitigate political risk, diversification and long-term investing is a must. Plus, Atlantis invests in companies with strong cash flows, cheap valuations and with a catalyst that has not yet been factored into the share price by the market.
Atlantis has around $4 billion in assets under management. Singapore will be the latest addition to its offices in London, Hong Kong, Seoul, Mumbai and Tokyo.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
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