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.
GSAM is one of a handful of asset managers with a QFII license, in this case for $200 million, which the firm says was oversubscribed several times. It has marketed the fund to pension funds and other institutions in Europe, Japan and other Asian countries other than China. A small amount has also been allocated to high-net-worth clients.
Vincent Duhamel, Hong Kong-based managing director for Asia ex-Japan at GSAM, says the firm intends to ask the China Securities Regulatory Commission for an additional quota. But in the meantime the fund needs to establish a track record.
Kenny Tjan, GSAMÆs Singapore-based co-head of Asia ex-Japan portfolio investments, will manage the fund. The firm also has a desk of equity analysts in Shanghai that will cover ChinaÆs companies.
Duhamel says the firmÆs strategy has been to get to know Chinese institutions and high-net-worth individuals and manage their international assets; to build an onshore research team that learns the A-share market; and now to manage assets in China for international clients.
Eventually, the firm hopes to have an onshore business for domestic clients, but that depends on eventual liberalisation. Duhamel says GSAM is unlikely to pursue a joint venture. Via Goldman Sachs, GSAM has potential partners in China for any projects that may arise, including the bank's JV partner, Gaohua Securities.
ôWe need a domestic strategy for China, Korea and India,ö Duhamel says. ôThis is the first step.ö
Although he wouldnÆt comment on potential returns in the new A-share fund, he says tracking error will be commensurate with an emerging market, in the 4-6% range. The fundÆs mandate is to be fully invested in A-shares, and will not take any asset allocation decisions.
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?
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