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.
BoC has been given a quota of $2.5 billion to invest via QDII by the State Administration for Foreign Exchange (Safe), an arm of the PeopleÆs Bank of China charged with managing foreign reserves. Last year it was the first commercial bank to put this to work by investing in overseas fixed-income funds.
In May, the Chinese Banking Regulatory Commission announced an expansion of QDII from just global bonds to include Hong Kong equities and international funds authorised (but not necessarily domiciled) in Hong Kong.
Anticipating the liberalisation, BoC has been in talks with Credit Agricole Asset Management and Fidelity Investments, according to executives at those two companies.
BoC has recently begun investing in their Luxembourg-domiciled equity funds, says Thierry Mequillet, regional CEO at CAAM. BoC officials could not be reached by press time.
The fund managers could not detail the exact nature of the investments but say that BoC has set up a fund of funds to tap their Sicavs, particularly aiming at H shares and red chips. Since last year it has also directly invested in global fixed income; combining the two, it has launched international balanced funds for its base of domestic retail depositors. BoC has reportedly invested up to $1 billion into overseas assets, or 40% of its QDII quota.
Beijing has approved a total QDII quota of $18.5 billion, of which $14.5 billion has been allocated to commercial banks. Up to 50% of this can now be invested in equity. Until recently there has been minimal uptake by mainland investors in QDII, because of fears the renminbi will appreciate and because the domestic A-share market has been so hot. Global fixed income hedged back into renminbi could only return a measly 1%. But groups like Bank of China hope a balanced international product may have some appeal, particularly if some investors grow nervous about a sharp correction in the A-share market.
The other appeal is that mainland investors can invest in H shares or red chips that may be trading at half the earnings multiples as the parentsÆ A shares. Mequillet predicts many mainland banks will roll out products themed around the convergence between A shares and Hong Kong-listed stocks of mainland companies.
Record low borrowing costs in Australia are feeding demand for the country's real estate, with domestic and global investors raising their allocations into the sector.
Experts have a diversified view on the appeal of private assets across the region, but one thing's for certain - inflows are rising, particularly into China and the US.
Malaysia's Armed Forces Fund hires new CEO; Canada's Omers appoints Asia capital markets managing director; HSBC Asset Management creates alternatives unit, appoints CIO as its head; Bank of Singapore names global wealth head; Aware Super hires IFA head; Hong Kong names acting head for MPFA; Schroders adding to Asia ESG headcount; and more.
Asian fixed income assets – including Hong Kong dollar (HKD) bonds – are luring growing numbers of global investors who are striving for reliable and consistent returns amid macro uncertainty compounded by rising inflation and rates, according to HSBC Asset Management.