BoCom International Asset Management has hired Jimmy Pang from AllianceBernstein as CIO and head of asset management in a newly created position as it strives to diversify its product offering and expand beyond China.
Pang, who joined Bank of Communications’ asset management arm in Hong Kong in December, describes the move as “a perfect opportunity to work with the fifth largest bank in China at a unique time when Chinese banks are expanding internationally”.
He says the firm is planning to launch several equity funds this year and early next, with Greater China, Asia and global exposures as themes, as well as a fixed-income RMB fund later this year.
Its Greater China fund will gain exposure to China’s equity market via H-share and red-chips in Hong Kong, he notes, rather than be dependent on the mini-QFII scheme.
He says that the emphasis will be on diversified country and sector exposures, adding: “Launching a fund focusing on a single country can be dangerous.” Accordingly, its Asia equity fund will cover markets in both emerging and developed Asia.
Pang also reckons that Japan’s equity market may surprise this year, given “it has experienced very low interest rates for a long time, many companies are traded at book value and they are cash rich”.
But he suspects this year will be a difficult one for emerging market equities “as everybody believes Bric markets are going straight up, but they may have forgotten that during 1980 to 2000, these markets have proven to be cyclical, so buy-and-hold is not that easy”.
Despite voicing concern that there are not enough RMB fixed-income products to invest in, Pang says BoCom International AM plans to tap the market by launching a fixed-income RMB fund this year.
“It is a matter of timing,” he states. “You don’t want to launch [a fund] and then be sitting on a pile of cash. You want to wait until there’s enough available bonds for investment at good yields.”
He notes that short-term yields of RMB bonds have come down compared to where they were issued initially, party because “too many funds are chasing [the bonds]”.
At present, BoCom International AM has two portfolio managers – Tom Ding and Alan Fung – along with an analyst, a trader, a marketing team, a risk team and a compliance team.
Ding, previously at Yinhua Fund Management Company, is managing Dragon Secular Growth Fund, a private fund dedicated to high-net-worth individuals. While Fung, having joined the company from China Life Franklin AM last March, manages Dragon Core Growth Fund, BoCom International AM’s first mutual fund that was launched in December last year.
Pang believes his 12 years managing global portfolios at Alliance Bernstein and the local experience of two portfolio managers will be complementary.
He adds that BoCom International AM may also consider new hires this year, but says the headcount “will grow in line with the launches of new funds”.
Pang is also optimistic that Bank of Communications’ strong distribution channel of over 40 branches, is “a big support” for the asset management arm and was a motivating factor for him joining the company.
“The bank’s retail customer base in terms of wealth products is just not as penetrated as its international peers, such as Citigroup or HSBC,” he notes, highlighting the potential for greater cooperation between BoCom International AM and Bank of Communications.