Dutch fund house Robeco plans to add sales staff to its 40-strong team in Hong Kong and Singapore as it seeks to expand its investor base among institutions and banks in Asia.
Tony Edwards, chief executive for Asia Pacific, concedes it is “always a struggle as foreigners in Asia”. But he expects investor attitudes towards the firm to change after Japanese financial services group Orix Corporation acquired Robeco’s assets for €1.9 billion ($2.5 billion) on June 30.
The Orix acquisition “subtly changes our conversation with [Asian] clients”, Edwards tells AsianInvestor, noting that part of the firm’s post-acquisition plans include strengthening its sales team in the region.
Robeco also aims to add more funds to its platform, although Edwards declines to offer specifics.
One investment theme that Robeco is a firm believer in is alternative energy, particularly when it comes to China, as the world's most populous country aims to increase its use of natural gas, solar and wind energy, shale gas and biomass. Robeco is eyeing natural gas and wind energy opportunities in particular.
While it will have to rely on oil for some time, Edwards argues that, historically, “human beings have applied technology to their advantage” and constantly evolve and develop.
“It’s quality over quantity,” he says. “China has done a fantastic job of raising so many people out of poverty. Now they have to let the private capital flow to encourage companies to create new opportunities.”
While there is a lot of negative noise on China now due to recent liquidity-tightening measures and volatile equity markets, the message from the government is clear – it will not measure growth solely on GDP numbers, but rather on the advance of people’s livelihoods, development in society and the improving quality of the environment.
These implications are significant, says Victoria Mio, CIO and co-head of Asia-Pacific equities at Robeco. In the past, she notes, the “local government’s obsession with GDP growth led to overinvestment, misallocation of resources and rampant corruption”.
While GDP growth has slowed this year, Mio adds, “deceleration is moderate, unemployment has not shot up and social stability is not threatened”.
She anticipates that China's slowdown will continue during the third quarter, and points to the Beidaihe conference – China’s economic summer meeting – as a key event. “Concrete reform measures and monetary easing in months ahead are likely steps to be taken towards supporting the real economy,” says Mio.
Another investment theme Robeco points to is environmental protection, with investment opportunities in the removal of air pollutants, waste-to-energy, waste-water treatment and biomass.
But not all investment opportunities it sees in China are about new technology. Many are centred on the introduction of amenities and logistics centres, with Edwards citing a lack of sufficient warehouses used to store food in China.