This year’s top 10 stories included a peek into AustralianSuper’s international equities build out in London, AMP’s move to slash employee benefits, and plenty of hard-hitting analysis of the issues that matter in institutional investment. But the real story is how readers helped shape all of that coverage.
Orbis’ Stuart Place is riding from Melbourne to the Moon and Back to fund a treatment for the “monster of a disease” that his youngest son was born with. The investment industry is rallying behind him.
Fullgoal joins the 3PD fold for Australasian distribution
Fullgoal Asset Management, one of China’s first fund managers to attract offshore shareholders, is widening its international distribution base. It has joined with third-party marketing firm 3PD for Australasia.
A subsidiary of Shanghai-based Fullgoal Fund, which was established in 1999 and has about US$151 billion (A$195 billion) under management, as at December last, Fullgoal has four investment teams covering Chinese equities and fixed income strategies.
The overseas equities investment team, based in Shanghai and Hong Kong, includes five portfolio managers and 10 analysts, supported by more than 30 domestically focused analysts. The HK office concentrates on HK-listed and US-listed Chinese securities and speaks for about US$7 billion of the total.
The international shareholders came on board in 2003 when Fullgoal was granted its special licence – still a rarity in Mainland China. The key offshore shareholder is Bank of Montreal. The firm has also secured several foreign-sourced institutional mandates, including a bespoke quantitative China equities strategy on behalf of ADIA (Abu Dhabi Investment Authority), held since 2016.
Michael Chow, a managing director and head of international business, based in Hong Kong, said the two investment offices act as one, sharing the same research platform. He joined the company in 2012, with the establishment of the Hong Kong subsidiary.
The four main investment teams cover: fundamental active management in China-A shares; quantitative equities management of China-A shares; and, listed fixed income and sovereign debt, all managed from Shanghai; and, Hong Kong-listed stocks and ADRs, from Hong Kong.
The firm runs about 160 mutual funds and ETFs as well as individual mandates for both Chinese and international investors.
Speaking of the latest distribution hook-up late last month (February 26), Chow said: “About 10 years ago we were encouraged by the launch of the QFII/RQFII [Chinese Government schemes] for the opening up of the Hong Kong office as a hub for foreign investment in China.”
He said: “Over time we will see more and more people investing directly in China. It is becoming more important as it reflects more of the MSCI index and we have had a lot of new investors in our small-mid-cap fund since that was awarded a five-star rating by Morningstar.”
The small-mid-cap fund was the number one performer out of Morningstar’s universe of more than 600 funds last year, with a return of 111 per cent and inflows which took the fund’s assets to US$780 million (as at February 16, 2021) from US$27 million at the end of December 2019.
Rob Harrison, one of the founders of 3PD, said that Fullgoal’s small-mid-cap fund represented the type of strategy he wanted to bring to Australia given the keen search for alpha by Australian and New Zealand investors.
He said: “Investors here, unlike their international counterparts, have been hesitant to invest in country-specific strategies. This has been, in part, due to a perceived lack of return for the added risk and the monitoring costs.
“But as Investors continue their quest for superior risk-adjusted returns and competitive advantage, they cannot continue to leave this potential source off the table. What is changing and why this is relevant now is that the World is experiencing another economic catastrophe from which there will be long term winners (Asia Pacific 20 per cent of market capitalisation) and losers (the Americas and Europe, 80 per cent of market capitalisation).
“Our challenge is to find investment managers that will be among the winners and we expect Fullgoal’s China strategies to qualify. We will be looking to introduce Fullgoal’s successful strategies to the institutional markets in Australia and New Zealand.”
Harrison formed 3PD with another experienced funds management marketer, Steven Larkin, last year, after spending several years in New York with BNP Paribas followed by Equity Trustees. So far, the pair have signed up three international managers: Promethos Capital, a Boston-based ESG specialist manager, Marylebone Partners, a London-based defensive absolute-returns manager, and now, Fullgoal Fund.
