Public and private fundraising to overseas markets, frequent search for "financial owners", foreign investment returning to A-share market is gradually showing signs
2024-09-23
Recently, domestic public and private equity institutions have turned their attention to overseas markets. Multiple large public fund companies frequently communicate and negotiate with overseas asset management institutions to attract overseas funds to invest in domestic stocks, bonds, etc. through fund special accounts. Currently, the clients are mainly concentrated in the Middle East region; Many private equity quantitative institutions are targeting the markets of Hong Kong and Singapore in China, hoping to enhance mutual understanding with clients and obtain incremental funds. Foreign institutions generally believe that the cost-effectiveness of current A-share investments is prominent, and historical experience shows that when the market is sluggish, it is usually the best time for long-term planning and exploring excess returns. Recently, China Securities Journal reporters have conducted research and learned that many large public fund companies have been making frequent overseas fundraising efforts. A public fundraiser introduced that the company attaches great importance to international business and has executives specifically in charge of overseas operations. Since 2023, corresponding executives have frequently traveled abroad to communicate and negotiate with overseas asset management institutions, hoping to expand overseas "orders". According to him, the cooperation with overseas asset management institutions is mainly aimed at attracting overseas funds to invest in domestic assets such as stocks and bonds through fund companies. The cooperation form is similar to special account management, with a high degree of customization, to meet the needs of overseas clients to the greatest extent possible. In terms of strategy, it leans more towards absolute returns. In terms of customer sources, they are currently mainly concentrated in the Middle East region. Another top public offering channel insider also told China Securities Journal reporters that the company has already conducted overseas business and cooperated with some overseas institutions. Currently, the amount of funds invested by overseas customers through the company is relatively small. He stated that although the contribution of overseas clients to the company's management scale is not significant in the short term, developing overseas business is similar to developing personal pension business. Fund companies focus on the long term and hope to make breakthroughs in the future. Starting from establishing cooperation, the scale gradually expands. As long as we can continue to generate revenue for overseas clients, the funds entrusted by overseas clients to the company for management will naturally continue to increase, and overseas business will also make greater contributions to the company's scale and profits. He also stated that expanding overseas customers and developing overseas business is a necessary path for Chinese asset management institutions to become world-class asset management institutions. In fact, domestic public fund companies have started cooperating with foreign asset management institutions even earlier. Since the signing of a memorandum of cooperation between E Fund and APG in the Netherlands in 2016, the two parties have gradually expanded their cooperation in pension management, asset management, and information technology exchange. In 2017, both parties announced the joint launch of the world's first pension management product that follows the international market's sustainable and responsible investment framework and standards, investing in the Chinese A-share market. APG is the largest pension management company in Europe and one of the world's largest trust management companies. This year, E Fund has communicated and cooperated with multiple foreign asset management institutions. In February, E Fund signed a memorandum of cooperation with Riyadh Capital, a leading asset management company in Saudi Arabia, to engage in exchanges and cooperation in the investment field; In August, E Fund had in-depth exchanges with Itau Asset Management, the second largest asset management company in Brazil, and reached a consensus on further business cooperation in the future. In addition to public funds raising funds overseas, many private equity institutions have also gone abroad to find money during the quantitative private equity overseas roadshow. According to industry insiders, several quantitative private equity firms have recently launched overseas roadshows, targeting overseas investors from Hong Kong and Singapore. A private equity industry insider said that many overseas investors have limited understanding of the mainland Chinese market, especially those from Singapore. Therefore, roadshows in Singapore focus more on providing basic knowledge dissemination. In contrast, many investors showed more enthusiasm during the roadshow held in Hong Kong, China. In addition, foreign institutions are closely monitoring the impact of the Federal Reserve's interest rate cuts and the current undervalued A-share market situation, trying to find opportunities for early layout. The director of operations of a private equity service company stated that based on the current development of the domestic private equity industry, it is still difficult for private equity institutions to "go global with investment strategies". At present, it may be more about "raising funds to go global", that is, introducing funds from overseas investors to invest in the A-share market. When it comes to the reasons for private equity groups going global, the industry insiders mentioned above stated that on the one hand, domestic institutions can continuously expand into new business areas and new funding channels on the basis of their existing business, seeking business iteration and upgrading; On the other hand, some foreign investment institutions have been paying attention to the Chinese market, just seeking suitable opportunities to enter. At this time, the overseas roadshow not only deepens the understanding and recognition of domestic asset management institutions by overseas investment institutions, but also allows them to understand the current attitude changes of foreign investment towards the Chinese market, so as to seize opportunities at any time. From the perspective of foreign institutions on the Chinese market, the cost-effectiveness of investing in A-shares is highlighted. Huang Senwei, a senior market strategist at Lianbo Fund, believes that although investor sentiment is not currently high, historical experience shows that this is usually a good time for long-term layout and exploring excess returns. He believes that firstly, several major bottoms in the history of A-shares occurred during periods of low valuation, such as June 2005, October 2008, June 2013, and January 2019. The current price to book ratio of the Shanghai and Shenzhen 300 Index is only 1.2 times, and the price to earnings ratio is only 10.8 times, both of which have reached the historical bottom range. Secondly, from the perspective of the cost-effectiveness of stocks compared to bonds, A-shares already have long-term investment value. Manulife Fund believes that the current A-share market is dominated by structural opportunities, and market sentiment and expectations are not satisfactory. It is optimistic about high winning dividend assets and industries with fundamental support, including overseas expansion, non-ferrous and agricultural industries with price increases, and artificial intelligence industries with clear industry trends. Lubomi Fund stated that it expects the A-share market to maintain a volatile trend in September, and there may be incremental policies in the future. The market direction may change in the fourth quarter. In terms of industry allocation, Lu Bomai Fund suggests using dividend assets as bottom positions and choosing growth targets in technology. On the one hand, cash flow is king, and dividend assets such as banks, utilities, transportation, and white goods can still be allocated after a pullback. The semi annual report of A-share companies shows that the performance of industries such as electronics and communications is good. As a small part of capital expenditure expansion at present, it is expected to benefit from its own industrial cycle, and can specifically focus on the Internet, optical modules, smart phone chains and other targets. (New Society)
Edit：NiChengRan Responsible editor：LiaoXin
Source：China Securities Journal
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