Connections trump everything in world of private equity in China
Private equity doesn’t have a long history in China, but it has grabbed attention over the past few years, partly because of the individuals standing behind the businesses. In other words, people are key in China. I mean, well, those special people.
How special is special? What kind of people are private equity funds looking for in China? Here is a job e-mail I received from a headhunter last week who is helping an unidentified “well established private equity firm with both US-dollar and yuan-denominated investment platforms” to hire a vice-president-level investment professional.
Posted by admin on July 29, 2013
Hong Kong: Hong Kong Tightens Controls Over Sales Of ILAS Products
Hong Kong regulators have tightened regulatory controls over the sale of Investment-Linked Assurance Schemes (ILAS) by imposing further requirements including commission disclosure, Key Facts Statement and customer’s declaration, as well as post-sale controls. These new requirements are aimed at enhancing customers’ understanding of the risks and features of ILAS in an attempt to better protect customers.
ILAS – the Good and the Bad
ILAS products are life insurance policies with an investment component. As the policyholder, the premiums paid are used by the insurer to invest in a number of different funds. The value of the insurance policy (including Death Benefit) is linked to the performance of the underlying funds and may fluctuate depending on market conditions. The attraction of such products is that they give customers access to a wide range of funds, as well as the flexibility of switching funds without incurring charges of the fund houses. However, the policyholder has no rights or ownership over the underlying funds and his only recourse is against the insurer.
Posted by admin on July 26, 2013
Brummer Prefers Private-Equity Bets Over Stocks: Southeast Asia
Brummer & Partners, the largest Scandinavian hedge-fund manager, will favor private companies rather than listed stocks to avoid volatility as it sets aside $120 million to tap growth in the Philippines.
“It is a better way to participate in the long-term growth of a country to be on the private side,” Patrik Brummer, founder of the Stockholm-based firm, said in an interview inManila yesterday. “Public markets are more volatile than private markets.”
The fund, which manages about $15 billion, is working with local partners Honorio Poblador and Javier Infante, he said. The private-equity fund, called Navegar, will over five years invest in eight to 10 companies that should generate returns of at least 20 percent each, Brummer said.
Posted by admin on July 10, 2013
Hedge fund Grandmaster sees stock market crash in China
Former chess grandmaster-turned hedge fund manager Patrick Wolff is betting on a stock market crash in China, where he says corruption and bad debts have spiraled to dangerous levels.
Speaking to Reuters on the sidelines of the GAIM conference in Monaco, Wolff said investors were too focused on trying to work out when easy money policies will taper off in the United States and ignoring a looming correction in China.
Posted by admin on June 21, 2013
Mitsubishi UFJ Financial Group Buys Hedge Fund Butterfield Fulcrum
Japan’s biggest bank holding and financial services company Mitsubishi UFJ Financial Group (MUFG) has snapped up one of the world’s largest hedge fund administrators in a bid to expand its business globally.
MUFG will buy Butterfield Fulcrum’s business, which has more than $100bn (€75.6bn, £64.5bn) of client assets, across 850 funds.
However, the financial terms of the deal were not disclosed.
Posted by admin on June 21, 2013
FOCUS: Chinese Gold ETPs Generating Investor Interest But Won’t Change Downtrend
HuaAn Asset Management, the firm behind one of the two newly approved Chinese gold-backed exchange-traded products, expects to see strong investor demand for the yellow metal.
Over the weekend, it was reported that the firm anticipates raising between 2 billion and 3 billion yuan, or about $326 million to $489 million for its new gold fund. In an interview with Reuters, Richard Xu, the fund’s portfolio manager, said the firm has received positive responses from institutional investors.
Because of the strong demand for gold, especially in Asian, analysts expect that HuaAn Asset Management could easily achieve its goal; however, it might not have a major impact on global prices.
Posted by admin on June 18, 2013
The Future of Real Estate Investing Amidst Rising Prices
China’s own brand of a housing bubble has Beijing chasing its tail and struggling to catch it. Recently, rising prices led the government to introduce market-cooling measures and tighten its grip on the real estate sector, raising taxes by as much as 20% for transactions. The tax was first introduced in Beijing. But in a lot of smaller cities those measures were never as strict as in Beijing because local authorities wanted to protect the property market to ensure fiscal revenues.
Investors are watching the real estate market closely; if prices continue to rise it will put pressure on the economy as the government would be required to put restrictions on lending. Is this the beginning of a wave of distressed real estate investing? What types of developments will be the next big opportunities?
Posted by Innovator on June 3, 2013
Wealthy Chinese investors present a huge opportunity for many of the world’s largest hedge fund managers.
China is targeting to expand hedge fund investing by licensing foreign shops; in fact, the Chinese government has asked the State Administration of Foreign Exchange to approve a US$5 billion quota for the planned qualified domestic limited partner scheme (QDLP), which will permit foreign hedge fund managers to set up domestic sales and marketing offices to raise RMB investment for the group’s offshore funds under management. While there are a number of specific requirements, the ability to boost AUM through
investments from wealthy Chinese investors presents a huge opportunity for many of the world’s largest hedge fund managers. How “excess” returns can be actually obtained in China? Are there best practices that can be transferred to the mainland? Will China’s beaten-down equity markets influence global managers’ decision making?
Posted by Innovator on May 31, 2013
BY ALEX FRANGOS
As the Euro Zone Flirts With Disaster, Asian Economies Stand at Varying Degrees of Preparedness
HONG KONG—Greek elections may have assuaged fears of a European financial contagion spreading to Asia, at least for the moment. But as troubles brew in Spain, where borrowing costs shot up again Tuesday, and as Greece faces more painful cuts to meet bailout targets by September, many wonder who in Asia is most exposed should Europe’s economy and financial system finally crack.
Lessons from the 2008 financial crisis show that while all of Asia tends to get hit when the world economy shudders, the severity differs depending on which countries have the biggest trade and financial linkages to the rest …
Posted by Innovator on June 21, 2012
By Dominic Lau TOKYO, June 21 (Reuters) – Japan’s Nikkei average broke above 8,800 for the first time in five weeks on Thursday, as sentiment was buoyed by a softer yen after the U.S. Federal Reserve held back from more aggressive stimulus steps to prop up the economy.
The benchmark Nikkei hit its highest closing level since May
17 and has recovered 7 percent from a six-month low on June 4.
Shrugging off a survey showing China’s vast manufacturing sector slowing for the eighth straight month, the Nikkei rose 0.8 percent to 8,824.07, driven by exporters, such as Honda Motor Co Ltd, up 3.5 percent, and Canon Inc, adding 1.4 percent. The Fed disappointed some investors by delivering only a limited expansion of monetary stimulus on Wednesday. It extended its “Operation Twist” beyond its original June expiration to the end of the year to boost the flagging U.S. recovery. It also cut its GDP growth estimates for the year.
“The fact they eased at all is a plus for the U.S. economy, while holding off on QE3 is good for the Japanese market as it didn’t strengthen the yen,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.
Posted by Innovator on June 21, 2012