Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The Baring China Growth Fund will be established as a UK-domiciled investment company with variable capital. The Baring China Select Fund will be established as an Irish-domiciled open-end investment company. Both will be run on the same basis, as actively managed best ideas funds able to invest in companies across the full market capitalisation spectrum.
William Fong and Agnes Deng will manage both funds. Both are part of the companyÆs Hong Kong-based Asia-Pacific equity team and co-managers of the Baring Hong Kong China Fund, which has delivered an annualised return of 21.6% in US dollar terms since its launch in 1982.
ôDespite recent market turmoil, we believe China and its related markets will continue to be strong drivers of global growth and highly resilient economies. In our opinion, the selloff has created many attractive investment opportunities,ö says Fong.
Barings expects to find the majority of the investment opportunities in Hong Kong and China, but is also looking for companies in Taiwan and Singapore that have extensive trade links with China.
As of December 2007, around 94% of the $8.2 billion Baring Hong Kong China Fund was invested in Hong Kong and China. Its top 10 holdings include China Mobile, Hong Kong Exchanges & Clearing, China Shenhua Energy, Tencent Holdings, China Overseas Land, Air China, China Communications, China Coal Energy, China Telecommunications, and Anhui Conch Cement.
BaringsÆs marketing director, Ian Pascal, says the two new funds have been launched in response to investor demand. The funds are expected to start investing in May.
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Actively managed funds were also not found to have better odds of higher returns than more passive funds.