The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
This is in line with FullertonÆs strategy of expanding its footprint in Asia though strategic partnerships, which it already has in markets such as Japan, Korea, India and Pakistan.
Fullerton was set up as the in-house fund management division of Singapore state investment company Temasek Holdings in 1989. The company was spun off into a separate business unit in 2003, but continues to manage part of TemasekÆs $132 billion global portfolio. Now, it is aggressively pursuing the growth of its business, particularly in the area of third-party fund management.
The investment partnership between Fullerton and Bosera involves sourcing, structuring and managing funds under ChinaÆs qualified domestic institutional investors (QDII) and qualified foreign institutional investors (QFII) programmes. QDII allows select mainland investors to invest overseas, while QFII allows select foreign investors to invest in China.
The partnership is also expected to extend to other areas, such as sharing risk management capabilities.
Investment allocations to Asia, particularly China, have risen sharply in recent years. Demand for overseas investments among mainland investors, who for many years were limited mainly to domestic investments, have also grown significantly. Fullerton CEO Gerald Lee expects those trends to continue in the long-term, and notes that any setback caused by the current turmoil on Wall Street and its domino effect on markets worldwide is expected to be temporary.
ôWhile there is no denying that Asian economies will be undergoing a slowdown, it will be temporary as the secular drivers of these economies remain intact such as the rising middle class, the growing household wealth accumulation and the continued advancement of various industries,ö Lee says. ôWe remain passionate about the outlook for equity markets, and the current depressed valuations only suggest that opportunities abound for managers who are based in the region and are thus familiar with local conditions.ö
Fullerton has more than 18 years of investment experience in managing Asian investments. Headquartered in Singapore, Fullerton is supported by two research offices in China and Vietnam, and two joint venture fund management companies in India and Pakistan.
Fullerton has spent the past few years strengthening its infrastructure to compete with the key players in Singapore and in the rest of Asia. The fund house manages around $2.4 billion in third-party funds. That excludes the amount the company manages for Temasek, which it declines to disclose, only to say that itÆs bigger than the companyÆs total assets for third-party funds.
FullertonÆs plans include increasing third-party fund assets it manages to $25 billion over the next 10 years. Most of the fund houseÆs clients are based outside Singapore. Most of its assets under management come from North Asia and some are from Europe.
Around half of FullertonÆs total assets under management is invested in traditional mandates, including funds managed relative to an index. One quarter of the assets is managed on an absolute returns basis in equities and bonds and the other quarter is in funds of hedge funds.
Despite its relatively small size in terms of assets under management, FullertonÆs structure is similar to that of a bigger institutional firm. The company has around 80 staff, including 30 fund managers.
Bosera, meanwhile, is one of the initial five fund management companies to be established in China. It provides mutual fund and pension fund management, and sub advisory services to Chinese and international investors via the QDII scheme. It has grown to become one of ChinaÆs largest fund management companies with assets under management of around $38.2 billion.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
Insto roundup: Norway's Oil Fund praises China governance efforts; NPS commits $100m to taxi-hailing app
Norway's Oil Fund welcome Chinese proposals improving transparency and shareholder protection; HK's MPF assets surge 35% year on year; Korea's NPS commits $100m to TPG consortium to invest in taxi-hailing app; Poba commits W270bn to European property; Malaysia's EPF sees investment income rise 59% year-on-year in first quarter, and more.