A set of leading lights in China's asset owner and fund management industries convened to discuss how Beijing's ongoing liberalisation of the country's investment industry was throwing open new investment possibilities, at AsianInvestor's latest Institutional Investment Forum China, on September 18.
The event included several leading asset owners and fund managers, as well as representatives from some of China's regulators. A key theme of the event was that country's market reforms and gradual opening offered more market opportunities, but that this also meant it was increasingly important to pick the right partners.
Benjamin Deng, chief investment officer of China Pacific Insurance Company, told delegates that finding quality third-party fund managers for overseas asset allocation was a challenge, which made it especially important to find and pick the right ones. However, that also offers international fund managers looking to take a majority stake in local players and offer more services.
Meanwhile family offices explained that it was possible to enjoy high single-digit yields on investments, provided you are prepared to take enough risk. Executives from Gopher Asset Management and Tuef Asset Management explained that they had managed to enjoy yields of around 8% to 9% a year by targeting overseas instruments that offer higher yields, and not putting money into the sort of low-returning fixed income yields that many local insurance and pension funds must heavily invest into, due to mandates or regulatory requirements.
However Hong Tiangyang, head of single family offices at Gopher, was also at pains to note the importance of finding quality offshore partners when investing offshore.
“We have to find reliable and accountable partners because it may possibly add risks for us to invest in alternatives in overseas markets,” he said.
One way to do that is to look at who else they work with in China, whether it's China Investment Corporation or the big insurance companies. “That’ll be the starting point,” Hong added. “And then we’re going to move to the deal structure."
Please click here for the gallery photos of speakers and attendees at the forum.