The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The fund will have an open-ended tenor, and will be launched in mid-December. The target size for fund raising is $300-$350 million. An annual management fee of 1.6% will be charged. Cathay says it is targeting both retail and institutional investors and emphasizes that this is a product for investors with a conservative disposition. There is no lock-up and redemptions can be made through both Cathay itself and high street banks.
Cathay says it hopes to achieve returns of 9% per annum and the fundÆs standard deviation is targeted at 7%.
The fund will invest globally in stocks of companies that either own or operate infrastructure, including power plants, water works, toll roads, airports, ports and communication facilities.
ôWe break down asset allocations by three segments: transportation, utilities and toll roads,ö says Frank Hu, a fund manager at Cathay Securities Investment Trust. ôMost importantly is that they have stable cashflows. They have to be listed companies, and we also look for those infrastructure stocks possessing high dividend yields.ö
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
Insto roundup: Norway's Oil Fund praises China governance efforts; NPS commits $100m to taxi-hailing app
Norway's Oil Fund welcome Chinese proposals improving transparency and shareholder protection; HK's MPF assets surge 35% year on year; Korea's NPS commits $100m to TPG consortium to invest in taxi-hailing app; Poba commits W270bn to European property; Malaysia's EPF sees investment income rise 59% year-on-year in first quarter, and more.