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 move is line with F&CÆs strategy of building a presence in Asia following the opening of its first office in the region in Hong Kong earlier this year. Details of the JV have yet to be finalised.
F&C is a London-listed asset management group that traces its origins back to 1868 with the launch of the Foreign & Colonial Investment Trust, which it describes as the first ever publicly listed investment fund. F&C is an active fund manager with a multi-specialist investment model. It manages around Ç121.9 billion in assets for institutional, insurance and retail clients.
Hua Xia Bank is one of the 12 nationwide joint stock commercial banks in China and has seen strong growth since its incorporation in 1992. Hua Xia became the fifth listed bank in China in 2003 when it floated on the Shanghai Stock Exchange. Hua Xia now has 294 outlets in 31 cities, with a footprint covering 19 of the 22 provinces in China. It employs around 10,000 people and has a global network of 464 correspondent banks.
Alvin Chua, F&CÆs head of distribution and business development for Asia, says the fund house is hoping to access both retail and institutional Chinese investors through the JV.
F&CÆs Hong Kong office serves as a hub from where the fund house raises assets from Asian institutional and wholesale investors, particularly pension funds and insurers, which account for 58% of its assets under management (AUM). The firm is bringing to Asia its full range of product capabilities from plain-vanilla equities, bonds, and cash to alternative investments such as property, hedge funds, funds of hedge funds, private equity, enhanced alpha and liability-driven investment products. It also has multi-manager capabilities and theme-based strategies such as socially responsible investing.
The Hong Kong office runs a distribution-only model. The product manufacturing function will be run out of London until the firm's Asian pipeline reaches scale. Initial relationship-building efforts are focused within the Greater China region, particularly among sovereigns, insurers and pension players in China, Hong Kong and Taiwan.
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Hesitancy aside, institutional investors eye Australia and Japan as promising geographies for private debt investments within Asia Pacific, with Greater China and Korea on the periphery.
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