There is definite proof that sustainability-focused funds are outperforming their conventional counterparts. But some experts believe the traditional explanations for this are wrong.
John Pearce has given up his job as CIO of Ping An Insurance after losing a two-year battle to bring about change at the Chinese insurance company.
In October last year, AsianInvestor reported that Pearce was still with Ping An, quashing widespread rumours at the time that he had been fired by the firm for his part in the multi-billion losses caused by an investment in the Fortis group. As we reported, he was not fired.
But by December, when the China Insurance Regulatory Commission (CIRC) commented publicly that it was not happy with Ping AnÆs aggressive overseas expansion and that the group would probably never recover from its billion-dollar losses in Fortis, Pearce had enough. That led him to exit Ping An at the end of 2008, according to sources familiar with the firm.
The original rumour about PearceÆs departure allegedly came from politicking senior executives who were displeased with his reforming ways, sources say. The public tension that they stoked by using the media was said to be too much for Pearce to bear. It is believed that he has now returned to Australia.
Pearce joined Ping An in January 2007 as a replacement for Philip Young, who left for a lucrative post in the then problematic China Pacific Insurance Group, a Carlyle portfolio company. Prior to Ping An, Pearce was CEO at Colonial First State in Australia.
Aside from his title as CIO of the insurance company, Pearce was also chairman at Ping An Asset Management in Hong Kong.
During his tenure, Pearce centralised Ping AnÆs various investment platforms in Shenzhen, Shanghai and Hong Kong. He drove substantial modernisation in the structure of the company, and pushed for a vision that Ping An Asset Management, a group subsidiary company, would one day be transformed from purely investing the insurance companyÆs assets to a truly professional institutional asset management company with the capacity to handle third-party asset management mandates.
Now that Pearce is gone, sources question just how much power he had in the company. They say Pearce was the face representing Ping AnÆs push into the international market, but that real control lay in the hands of two men with lesser titles.
In terms of investments, deputy CIO Timothy Chan was the real man in charge; and managing director Shan Hock Liew was the man calling the shots in Ping AnÆs Hong Kong asset management office.
Since PearceÆs departure, Ping An appears to have decided not to appoint a replacement.
Furthermore, a list of international deals signed under PearceÆs tenure might be left to flounder because of a lack of consensus and on-going support. These include contracts for investment advisory services provided by Fortis and Mercer. FortisÆs spokesperson in Hong Kong confirms its contract with Ping An lapsed some months ago; while MercerÆs spokesperson did not respond to requests for comment on this story. MercerÆs deal involved an exclusive distribution agreement for multi-manager products in China.
Only Value Partners, in which Ping An still holds a 9% stake purchased in its November 2007 IPO, still has an on-going arrangement with the group in its services for portfolio advisory.
PearceÆs story is a sad tale of a lone expat trying to drive change in China.
He was very much admired by international insurance peers, who saw him as a signal of Ping AnÆs intention to become a truly global company. His departure suggests that the resistance to change runs deep in ChinaÆs institutions.
With Ping An stepping back from the international stage, global commentators will be asking what it means for the Chinese insurance industryÆs future appetite for overseas development and investment.
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