Safe Investment Company is recruiting for multiple vacancies in Hong Kong to enhance its in-house asset management capability in a move seen as a first step towards improved transparency.
Its advertisements indicate that six positions need to be filled, namely portfolio manager, investment associate, investment analyst, risk management officer, execution trader and settlement associate.
The company, which is the investment arm of China’s State Administration of Foreign Exchange (Safe), claims to offer highly competitive remuneration “comparable to the level offered by the other leading financial institutions in Hong Kong”.
Michael McCormack, executive director at Z-Ben Advisors based in the UK, suggests these public recruitment adverts hint at a more aggressive and open strategy by Safe as it seeks to build its investment capabilities internally.
He also believes that “over the next year or two, certain parts of Safe are going to be more transparent, such as the way it deals with mandates and external fund managers and investments in equity instruments”. He sees this public recruitment campaign as the first step towards such transparency.
According to the US-based Sovereign Wealth Fund Institute, Safe Investment Company is the largest sovereign wealth fund in China with about $347 billion of assets under management, which also makes it the fourth-biggest country fund globally.
Incorporated in Hong Kong as a privately held company, the firm’s mission is to gain investment returns through diversified holdings of foreign and domestic equities and fixed income securities and to reduce China's exposure to the US dollar.
Established in 1997, Safe Investment has accumulated experience in global investment and maintained a large pool of liquid equity and fixed-income assets so it can become less reliant on external managers.
McCormack believes that Safe is entering into a new phase where it will staff-up and build in-house investment capability.
According to the advert, the portfolio manager is expected to “research and monitor investments within a defined large-cap universe as well as uncovering new opportunities outside that universe”, should have more than five years’ relevant experience and an in-depth knowledge of global financial markets, in particular the US and Europe.
Meanwhile, the risk management officer and execution trader are required to demonstrate knowledge and experience in fixed-income and equity portfolio and derivatives.
The company has made significant investments in the UK stock market. According to Bloomberg data, Safe’s holdings in FTSE 100 companies are worth $22 billion, or 0.74% of the index’s overall market capitalisation. Energy and basic materials stocks are favoured.
McCormack notes that Safe has built up investments in liquid large-cap stocks in all major markets over the years. “Now it is more comfortable taking some liquidity risks and is starting to look at investment opportunities in small to mid-cap stocks it was not able to in the past,” he adds.
Moreover, he notes that Safe will look into smaller and less developed markets. “Almost all Chinese institutional investors are interested in Asian emerging markets, such as Vietnam, Malaysia and Indonesia,” he says.
“Safe is now ready to start a new phase of investment in non-traditional central bank assets and is comfortable with the idea that a small portion of its portfolio doesn’t need to be quite liquid and callable.”
To make such changes happen, he adds, Safe needs to staff-up first.