Hong Kong-based China Alpha Fund Management sees interest in Chinese assets rising among US investors and hopes to tap this demand, says Brenda Tse, the firm's new head of business development.
The long/short equity manager aims to expand its international client base, and Tse's first target will be American institutions, via a recently established feeder structure for its flagship fund.
Indeed, the reason China Alpha decided to add resources was the rise in foreign interest in the mainland market last year, noted Tse, who joined in August from fund-of-funds firm Permal. Her role is a newly created one, with business development previous shared among other employees.
And despite the recent crash in Chinese stocks and subsequent government intervention, she said, US institutions have been visiting the region in the past few months, seeking to get a better understanding the market from managers on the ground. They see Chinese valuations as more reasonable now, added Tse.
“The high volatility this summer might lengthen their investment process a little, but their long-term view of China is still intact,” she added. “They are not totally giving up.”
Ultimately, China Alpha is seeking “quality” investors with a long-term view, said Tse. Rather than seeking quick AUM growth, she wants to build a client base of firms that don’t trade on the back of short-term market volatility.
The firm’s ability to short-sell has benefited it this year. The firm’s flagship long/short Greater China equity strategy has generated a return of 1.85% this year as of September, against a 13.5% drop of MSCI China index and a 5.6% drop of Shanghai Composite index.
In addition to Tse's hire, the $460 million manager in July appointed former JP Morgan senior banker Philip Zhai as chief executive. China Alpha did not clarify who was CEO previously.
Tse had been head of Greater China at Permal, a subsidiary of US fund house Legg Mason. Brad McCarthy, Singapore head of Permal, has assumed Tse’s role.
Permal has also recently recruited Brenda Lau to lead client servicing in Hong Kong, Taiwan and Macau, which previously fell under Tse's remit. Lau was previously Hong Kong-based vice president of relationship management at private equity firm Hamilton Lane.