Mercer wins Ping AnÆs QDII mandate

Pending regulatory approval, Mercer is building the first retail multi-management platform in China.
A year since setting up camp in Hong Kong, Ping An Asset Management has been busy making moves to prepare for the coming QDII money, currently with an approved quota of $1.75 billion.

It has appointed Mercer Investment Consulting to assist with third-party manager searches and to build a multi-manager platform for the upcoming overseas investment-linked policies. Subject to regulatory approval, Ping An will distribute overseas investment funds and MercerÆs manager-of-manager products to retail customers.

Ping AnÆs QDII investments will be managed by its Hong Kong office. Head of asset allocation Ricky Ho, previously head of tactical asset allocation at Zurich in Switzerland, says Ping An now has a headcount of 40 in Hong Kong and full capacity to trade Hong Kong equities. However, he adds MercerÆs appointment is crucial to help expand its overseas investment capability.

Ho adds the Hong Kong office will serve as Ping AnÆs hub for overseas expansion in the long run and also help manage the QDII assets of parent company Ping An Insurance. His team includes investment manager Victor Tsang, previously a hedge fund manager at Quam.

Last week Ping An purchased a 40% stake in Hong Kong fund manager Value PartnersÆs IPO. John Pearce, formerly CEO of Colonial First State, is now chairman of Ping An Asset Management. He could not be reached for comment regarding what role will Value Partners will play in managing Ping AnÆs portfolio.

Tony Cole, leader of MercerÆs investment consulting business for Asia Pacific in Sydney, says MercerÆs search mandate include international, European, Japanese and Asia-Pacific third-party equity products. The multi-manager product that it develops with Ping An will initially be a portfolio on global equities, but that may expand to include other asset classes in the future.

Ping An and MercerÆs partnership will mark the first multi-management platform dedicated to retail investors in China. This is also an expansion of MercerÆs multi-manager service in Asia Pacific outside of Australia. Cole says recent deregulation and liberalisation to investments in Asia is a significant driver to the recent increase in multi-manager sectors, adding Mercer plans to enter the Korean market soon.

Regulated by the China Insurance Regulatory Commission, the Ping An Group is the second-largest life insurance company in China, after China Life. As of June 30, 2007, Ping An Asset Management managed a total of RMB360 billion ($48.55) of assets, while its parent Ping An Group has total assets of RMB632 billion ($84.12 billion). It provides insurance coverage, banking service, investment and wealth management for about 40 million individual clients and nearly two million corporate clients.
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