SINGAPORE (Oct 16): Hong Kong-based CSOP Asset Management believes many investors outside China have “under-allocated” investments in China because of unfamiliarity. They are keen to participate in China’s markets, but are reluctant and apprehensive.
CSOP, by setting up an office in Singapore, wants to help address this concern. “Singapore is a bit far from Beijing. Hopefully, CSOP can shorten the distance,” says Ding Chen, the company’s CEO, at a press briefing on Oct 16.
The company, which was started just 10 years ago, has some US$6.2 billion ($8.5 billion) worth of assets under management. CSOP is the first offshore asset manager set up by a regulated asset management company in China to establish operations in Singapore.
For a start, it will set up private funds here in Singapore tailored for institutional and sophisticated investors such as family offices. The core investment capabilities offered includes traditional long-only equities, high yield fixed income strategies and China access strategies.
“We will design new strategies for investors here,” says Melody He, CSOP’s managing director and head of sales and product strategy, at the same briefing. Offerings for retail investors might only come later, as the company wants to get a better understanding of the market first.
Next, CSOP might want to offer Shariah-compliant investments. Additionally, as part of its plans to expand its capabilities across a diverse range of asset classes and strategies including fixed income and foreign currency, it will look into building a portfolio management team in Singapore as well. Thereafter, CSOP SG will explore collaboration opportunities with asset managers and sovereign wealth funds in the form of institutional mandates, and, or act as sub-investment advisor or investment manager of existing or new fund structures.
“China is quite a ‘complex’ investment decision,” says He, referring to the intricacies and quirks of the country that has befuddled most foreigners.
However, investors of developed markets, specifically US, have enjoyed a good run and they are keen to explore new opportunities. China, as an “under-allocated” sector, is a natural choice – given the growth potentials underpinned by the 1.4 billion people.
“We see clients’ sentiments changing in the past year. China is a market that cannot be missed. There should be investment flows from developed markets to China,” says He.
When asked, Ding does not see “drastic” outflow of money from Hong Kong to Singapore, amid the months-long protests. “We don’t have clients moving from Hong Kong to Singapore; we hope the situation can be stable soon,” she says.
CSOP’s office opening was attended by guests such as Leong Sing Chiong, Assistant Managing Director (Markets & Investment), Monetary Authority of Singapore and Loh Boon Chye, CEO of SGX.
