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 Hong Kong office will serve as a hub from where the firm will raise assets from Asian institutional and wholesale investors, particularly pensions and insurers, which accounts for 58% of its $199 billion in assets under management.
F&C is credited for launching the worldÆs first publicly-listed investment fund û Foreign & Colonial Investment Trust. 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 investments products. It also has multi-manager capabilities and theme-based strategies such as socially responsible investing.
Alvin Chua, a veteran investment banker who was most recently the head of fixed-income sales and trading for Asia at Banc of America Securities, has been appointed F&C's head of distribution and business development for Asia. He brings with him one of the industryÆs largest rolodex of over a decade's worth of Greater China institutional contacts, particularly amongst central banks, sovereigns and insurers.
A graduate in Accounting from University of Texas and a holder of an MBA in Finance from the University of Chicago, ChuaÆs investment banking career dates back to 1987 when he started working as a sales trader at Merrill Lynch in New York. In 1991, he joined Lehman Brothers where, by 1997, he was made a head of credit emerging markets distribution. Before Banc of America, he had a two-year stint as head of fixed-income sales for Greater China at JPMorgan Chase.
Chua reports to Cristobal Mendez de Vigo, head of distribution and business development in London and most recently a CEO of Allianz Global Investors in Australia. Prior to Australia, Mendez de Vigo was head of strategic planning and business development in Hong Kong. He is the mastermind behind F&CÆs global push and is credited for new distribution relationships in Spain, Italy, Russia and Chile.
The Hong Kong office will be run using a distribution-only model. The product manufacturing function will be run out of London until the firm's Asian pipeline reaches scale.
Chua says his initial relationship-building effort will be focused within the Greater China region, particularly among sovereigns, insurers and pension players in China, Hong Kong and Taiwan. He is still looking for two senior heads for Korea and Singapore.
In ways Chua's career has moved on with the transition of times - Asian institutions are moving on from a fixed income-focused trading mentality. He notes that the rising threat of inflation and currency pressures have made matching assets with liabilities a serious challenge for most institutional balance sheets. One way to meet the challenge is to look outward and find better asset management solutions.
ôThe landscape has changed. We are now in phase two û institutions need to look for better sources of alpha,ö Chua says.
F&C plans to distribute its products through a selective wholesale platform. Friends Provident, a shareholder in F&C, is the firm's initial distribution partner. Negotiations with other potential partners are subject to regulatory approval.
London-listed F&C has offices in Boston, Paris, Frankfurt, Dublin, Amsterdam, Lisbon and Stockholm.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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