MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
FidelityÆs Polly Kwan, who has three years experience investing in property equities, will manage the fund. ôIÆm running the fund on a long-only basis,ö she says. ôI shanÆt be taking any short positions on property shares.ö So it is therefore a fund for investors who have an unalloyed bullish view of Asian property, which, given the two-way volatility swings of property equities in Asia, naturally limits the returns available from active management.
But this is not a hedge fund. It has a minimum investment of $2,500 and will be distributed via FidelityÆs network of 100 distributors in Hong Kong, including retail banks and insurance companies. Charges are up to 5.25% upfront with a 1.5% annual management fee. The fund is to a large extent staffed, but it is still looking to hire property analysts in Singapore and Mumbai.
Fidelity market-researched the establishment of this fund and commissioned a survey from AC Nielsen, which approached 515 investors each with minimum monthly net income of HK$15,000. What they discovered from this group of distinctly non-high-net worth individuals was that about a third were optimistic on Hong Kong real estate, but didnÆt have the money to acquire physical property. One rationale predicating this fund therefore was to plug the investment gap for investors who are bullish on real estate but canÆt afford physical property.
This seems to neglect the obvious riposte that this fund invests not in physical property but in property shares, which presumably those low-net-worth investors polled could still go out and buy in small lots if they just put a call into their broker.
Fidelity Hong Kong was formed in 1981. It is one of the largest providers of Orso [Occupational Retirement Schemes Ordinance] pension schemes in Hong Kong. It is a subsidiary of Fidelity International Limited, which manages global assets of $276 billion outside of North America.
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.
The recent focus on greenwashing has put bond issues under greater scrutiny. However, some market participants believe this risks paralysis by analysis.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.