China Private Equity in 2017 and Beyond
|
|
- Marion Frederica O’Connor’
- 6 years ago
- Views:
Transcription
1 Nr. 2, 217 China Private Equity in 217 and Beyond China presents a challenge for financial investors. On the one hand, it is now the world s secondlargest economy by some measure. It continues to grow at rates well in excess of those in Europe, Japan and the U.S. It is undeniably a country on the move, one that is exciting to watch and, in our opinion, one in which investors should participate. On the other hand, worries about the Chinese economy seem to have received more than adequate attention from the world s financial press. There is certainly plenty to be concerned about: slowing macroeconomic growth, increasing levels of debt, a possible bubble in residential property prices, volatile public equity markets and, most recently, a depreciating currency and capital outflows. There are good reasons to believe that the Chinese leadership will be able to manage these issues without suffering serious crisis, for reasons we discuss in this paper. In addition, we are convinced that thoughtful private equity investors can achieve attractive, risk-adjusted returns while participating in the continuing development of what is anticipated to become the world s largest economy. Slowing growth Reports of the slowing rate of macroeconomic growth in China must be placed in context. While the rate of growth has indeed slowed from unsustainably rapid levels, it is quite robust by global standards and is likely to remain so. Indeed, as illustrated in figure 1, China is expected to account for nearly a third of all real global GDP growth in 217. While a country s macroeconomic growth alone cannot produce good private equity investment performance, it certainly helps. This is especially true in China, where most of the growth is coming from private companies unable to borrow from banks or access public debt and equity financing to the same degree as in other countries. Figure Real Global GDP Growth (%) China China alone makes up 33% of growth Emerging Markets ex-china U.S. makes up 1% Other Emerging Markets make up another 46% of growth in 217 U.S. Other World As of January 217. HQ Capital makes no guarantee of future outcomes and/or targets. Note: Other Emerging Markets are all emerging markets as defined by IMF excluding China. Other includes residual countries not picked up by the other three categories, namely Advanced Economics defined by IMF ex-u.s. Source: IMF, World Economics Outlook October 216.
2 Moreover, although the overall rate of growth has slowed from the torrid pace of the early years of market-oriented reforms, most of the slowdown is due to the actual decline of certain sectors dominated by state-owned enterprises ( SOEs ), which themselves account for the lion s share of bank borrowings and public market financing. Massive overcapacity in certain sectors dominated by the state, such as steel and cement production, is proving to be a major drag on Chinese growth. The fact that most economists predict 217 to see growth in the range of 5-6.5% suggests that the privatelyowned businesses in which our fund managers invest, such as healthcare and financial services, education and new technologies, are growing much more rapidly than the overall rate indicates. Growing debt China s SOEs are a problem for the country s economy in more ways than one. Notably, they account for a meaningful proportion of the increased level of societal debt that, having reached roughly 26% of GDP -- up from 154% in has caused some anxiety among international investors. The Chinese government is also concerned about that phenomenon. Its agencies are now actively employing a number of measures aimed to control and reduce debt generally and in particular SOE borrowings, including a substantial and continuing program of swapping debt for equity. Controls on the growth of private credit in the nonbank financial sector are also being implemented. Whether such measures prove efficacious in the slow process of reforming the SOEs remains to be seen, but it is clear that the Central Government is committed to bringing the overall rate of growth in debt under control. Some commentators have likened the growth in private credit, which has fueled a rise in real estate prices, to the situation that prevailed in the U.S. during the years immediately prior to the financial crisis of 28. While it is true that a large percentage of China s societal debt which as a percentage of GDP is still only half that of Japan s is held by households who have borrowed principally to purchase the residential properties they occupy, there are important differences from the U.S. experience. Most mortgagees in China have a substantial amount of equity tied up in their property, with loan to value ratios much lower than in the U.S. both before and after that country s housing crisis. Moreover, there are no non-recourse mortgages in China. With unlimited personal liability, Chinese borrowers tend not only to be more prudent but also more prone to refrain from selling even during a prolonged period of suffering negative equity. It is important to note also that the majority of China s debt is domestic. As the major domestic lenders are well-capitalized state-owned banks incented by regulation to write off bad loans, and as the finances of the ultimate owner of China s SOEs the Central Government -- are healthy, astute and well-informed observers such as Shan Weijian of PAG do not believe there will be a financial crisis in China or even an economic hard landing. Figure 2 The magnitude of China s middle-class growth is transforming the nation 256 1% = million 3 Share of urban households, % million Urban private consumption, % 1 1,48 Billion RMB ,84 Billion RMB Income segment 2 Affluent Upper middle class Mass middle class As of January 217. HQ Capital makes no guarantee of future outcomes and/or targets. 1. Figures may not sum to 1%, because of rounding; data for 222 are projected. 2. Defined by annual disposable income per urban household, in 21 real terms; affluent, >229, renminbi (equivalent to >$34,); upper middle class, 16, to 229, renminbi (equivalent to $16, to $34,); mass middle class, 6, to 16, renminbi (equivalent to $9, to $16,); poor, <6, renminbi (equivalent to <$9,). Compound annual growth rate. 3. Source: McKinsey Quarterly, Mapping China s Middle Class, June 213 Poor That is not to say there are no problems in the economy generally or the financial system in particular. Nor do we think that the resolution of such problems will be easy. But there are strong grounds to conclude that China s debt is not going to be the problem that some observers have claimed it could be and that the Chinese economy is fundamentally stable. Stability does not produce good private equity returns by itself, of course, but when coupled with growth it certainly helps. Exciting sectors Turning to opportunities, it is clear that growth in the sectors in which our investment partners are currently most active including education, financial services, and healthcare is strong and likely to remain so for some time. This growth is due to the rise of China s middle class, members of which have increasing amounts of income to spend and invest. Five years ago, the number of middle class urban households in China defined by McKinsey & Co as enjoying annual income of between $9, and $34, reached 174 million. As figure 2 illustrates, five years from now that number is forecasted to rise by nearly 1 million households, with the percentage in the upper middle class rising nearly three times. Forecasted growth of private consumption, CAGR, , % 1.3% (All income classes) 19.6% 22.4% -3.3% -1.5% HQ Capital Insights, Nr. 2, 217
3 Figure 3 By 22, Chinese consumption is expected to grow by $2.3 trillion even if GDP growth slows to 5.5%. Nominal private consumption, 22 (in $trillions) Incremental growth in Chinese consumption over the next five years is expected to equal a market roughly 1.3x the size of Germany or the UK U.S. China India Japan Germany UK France Consumption growth forecast, Private consumption, 215 As of January 217. HQ Capital makes no guarantee of future outcomes and/or targets. Note: Assumes annual GDP growth rate of 5.5%. Because of rounding, not all numbers add up to the totals shown. Sources: Economist Intelligence Unit; BCG analysis, December 215 The consumption power of China s middle class households is already very sizeable and is projected to grow rapidly in the coming half decade. Another forecast, presented graphically in figure 3, gives a sense of the scale of this consumption, with the incremental growth projected for the period being roughly equivalent to total consumption in Germany and larger than in the U.K. Figure 4 China healthcare expenditure (in RMB billions) As Chinese households have grown in wealth, they have sought the same goods and services as people in other countries. At present, we are seeing strong appetite for better quality consumer products, including safer and healthier food; increased expenditure on leisure pursuits and experiences, including travel; strong demand for supplementary education at the pre-school level as well as vocational and language training; and an insistence on more and better healthcare products and services. Some of these powerful trends are illustrated in figures 4, 5 and 6. Figure 5 Investment in China s education industry (in RMB billions) Total Amount (left axis) Number of deals cases (right axis) 3 5 CAGR 14.2% E 217E As of January 217. Past performance is not necessarily indicative of future results. HQ Capital makes no guarantee of future outcomes and/or targets. Source: McKinsey Report, NHFPC, SBCVC, HQ Capital Analysis As of January 217. Past performance is not necessarily indicative of future results. Source: Zero2IPO, IT Juzi, Deloitte Analysis, HQ Capital Analysis HQ Capital Insights, Nr. 2, 217
4 Figure 6 Total annual Chinese outbound trips (in millions) Number of trips (millions) Year Trips (in millions) Annual Growth % 11% 1% 8% 9% 11% 1% 9% As of January 217. Source: DFS PRC Segmentation Research 215; China Statistical Yearbook 215; Li & Fung - Global Chinese Shoppers: Carrying Spending Momentum into 216 In addition, the middle classes and the affluent in China are looking for ways to manage their finances better, protect themselves from loss and improve returns on their savings. As figure 7 shows, household financial assets in China remain overwhelmingly in cash and deposits. This can be expected to change rapidly and China is already seeing new forms of financial services developed by non-traditional players, such as internet giant, Tencent, and private equity-backed Ant Financial. In many cases, the goods and services being sought by the increasingly affluent Chinese are not supplied at all by SOEs, or are supplied badly, with private enterprises filling the breach. Such enterprises often find it difficult or impossible to obtain finance for growth from traditional sources and therefore are the principal users of private equity capital. We look for managers who understand these trends and others, such as the growth of new industrial models and materials, and who have developed the expertise to be value-adding partners with their portfolio companies. Challenges and opportunities, old and new One challenge for private equity investments in China remains exits. Many China-focused growth capital funds invested during the past decade remain unable Figure 7 Composition of household financial assets in China and the U.S., 212 (% of total) China U.S. Cash & deposits Stocks Funds Bonds Other managed assets Other Retirement accounts n/a 38.8 Cash value life insurance n/a 2.7 Total 1 1 As of January 217. Past performance is not necessarily indicative of future results. Note: Other includes wealth- management products, gold, derivatives and other assets. Sources: US Federal Reserve Consumer Finance Survey; The Economist Intelligence Unit to divest and return capital to their investors. We believe this was due in large part to inexperience and an overly optimistic sense of their ability to access public equity markets. While the public equity markets have steadied since China s stock market bubble and crash of 215 and initial public offerings ( IPOs ) have resumed, the road to a domestic IPO remains long and hard for most private companies. It is essential that private equity managers in China have the discipline and skills to find other avenues to exit their investments. Fortunately, the growth of domestic mergers and acquisitions as well as dividend recapitalizations have presented some new liquidity solutions. At the same time, troubles for existing portfolios can produce attractive opportunities for secondary investors having the requisite contacts and expertise. HQ Capital Insights, Nr. 2, 217
5 In addition, private equity investors in China face a couple of new challenges, to which they and their local investment partners must be attentive. The first challenge is the rise of domestic currency funds, in some cases sponsored by government agencies but also funded by domestic individual investors looking to diversify from public equities and real estate. These funds, which are often structured and managed very differently from those more familiar to international investors, have in certain sectors driven up entry valuations to unsupportable levels. Dollardenominated funds cannot compete with such funds on pricing and therefore need to win by demonstrating superior ability to add value to the company in which they are investing. Fortunately, we Figure 8 Index Performance of Different Asset Classes in Asia (Indexed return) Asia Pacific PE & VC Shanghai Composite Index HFRX Asia with Japan MSCI AC Asia Pacific believe Chinese business owners are becoming more discriminating in this regard. A second challenge has to do with China s currency, the renminbi, which is likely to depreciate in the year ahead. While China s central bank is unlikely to surprise the markets with a sudden move, as in 215, policymakers do see the need to let the currency fall against the U.S. dollar. Although the renminbi has fallen less against the dollar than the pound or the Euro during the past three years, this is due in large part to the efforts of the central bank. It seems likely that the combination of a gradual weakening of the currency and much stricter capital controls will continue, requiring managers to underwrite appropriately and hedge when doing so is economical. On the opportunity side of the ledger, we are seeing a growing number of control transactions and international expansions involving Chinese companies and private equity sponsors. The control deals arise because some sectors are becoming increasingly ripe for consolidation. In addition, the entrepreneurs who created China s first private companies are growing older. Many will likely seek to sell their businesses as the dream of an IPO fades and when confronted with health and succession issues. International expansion for larger Chinese companies is natural. Doing so successfully, however, whether by acquisition or through joint ventures, presents challenges that many such companies do not yet possess the human resources to meet. One way for such companies to address such challenges is to work with private equity firms, such as Hony, PAG Asia and Primavera, adept at helping to bridge gaps in skills and experience. As of January 217. Past performance is not necessarily indicative of future results. Source: Cambridge Associates LLC Asia & Pacific PE & VC returns are pooled end-to-end returns, net of fees, expenses and carried interest. Based on data compiled from 447 Asia/Pacific private equity (buyout, growth equity, private equity energy and mezzanine funds), and venture capital funds, including fully liquidated partnerships, formed between 1986 and 215; FactSet In summary Global investors understand that China s role in the world economy is already huge and destined to grow larger. It is also clear that it is not easy for financial investors to participate in this exciting but complex market. What should become increasingly clear is that one way for investors to allocate capital is through the thoughtful use of private equity, which as figure 8 makes plain has significantly outperformed public equity investing in China over a meaningful period of time. We believe that there continues to be excellent opportunities in China available for granular, bottomup investors with adequate resources on the ground and experience of the market. Volatility elsewhere in the world and an overly simplistic approach to debt and slowing macroeconomic growth in China have obscured those opportunities for many investors. We believe this has made the environment all the more attractive for those able to see past headlines and exploit the opportunities presented by inefficient and relatively opaque capital markets in the region. Of course, the key to successful private equity investing in China, as elsewhere, is to work with local partners who have relevant expertise and experience and whose interests are properly aligned with those of their investors HQ Capital Insights, Nr. 2, 217
6 HQ Capital has a well-established presence in Asia, with two offices in China and a seasoned local team. Through our various investment programs, we seek to help investors build well-constructed private equity portfolios through a combination of primary commitments to funds and the acquisition of interests in the secondary market, managed by partners having the qualities we believe essential for success. About the Author For further information about our programs, please contact us. David Pierce Managing Director, Head of Asia david.pierce@hqcapital.com HQ Capital Asia Limited Suite 174, 17/F, One Exchange Square, 8 Connaught Place, Hong Kong Tel Important Disclaimers and Performance Disclosures General: The information contained herein regarding HQ Capital is confidential and proprietary and intended only for use by the recipient. The materials may not be reproduced, distributed or used for any other purposes. The information contained herein is not complete, and does not contain certain material information about alternative investments, including important disclosures and risk factors associated with an investment in these types of vehicles, and is subject to change without notice. This document is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation of any offer to buy, shares or limited partner interests in any funds managed by HQ Capital. If any offer is made, it shall be pursuant to a definitive Private Placement Memorandum/Offering Memorandum prepared by or on behalf of a specific fund which contains detailed information concerning the investment terms and the risks, fees and expenses associated with an investment in that fund. Neither the Securities and Exchange Commission nor any state securities administrator has approved or disapproved, passed on, or endorsed, the merits of these securities. Performance: The performance information herein has been prepared by or on behalf of HQ Capital, and has not been independently audited or verified except for certain year-end data. Investment returns may vary materially from the stated objectives and/or targets so that investors may have a gain or a loss when they redeem their investment. As with any investment vehicle, past performance cannot assure any level of future results. Forward looking statements constitute the opinion of HQ Capital. HQ Capital does not guarantee any specific outcome or performance. Risks: Investments in alternative investments entail substantial risk and should not be intended as a complete investment program. The profitability and return of alternative investments are dependent upon numerous factors, which may include the active management of securities, across global markets. There are no opportunities for redemptions and transferability of interests in alternative investments may be limited so investors may not have access to capital when it is needed. Alternative investments are designed only for sophisticated investors who are able to understand the scope of and bear the economic risk of losing all of their investment. Alternative investments: (1) often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; (2) can be highly illiquid; (3) are not required to provide periodic pricing or valuation information to investors; (4) may involve complex tax structures and delays in distributing important tax information; (5) are not subject to the same regulatory requirements as mutual funds and other publicly traded securities; and (6) often charge high fees. Current information: Opinions expressed are current opinions as of the date appearing in this material only. The information provided in these materials is illustrative and no assurance can be provided that any of the future events referenced herein (including projected or estimated returns or performance results) will occur on the terms contemplated herein or at all. While the data contained herein has been prepared from information that HQ Capital believes to be reliable, HQ Capital does not warrant the accuracy or completeness of such information. The underlying managers used by HQ Capital in its portfolios are subject to change in the future and there will likely be additional managers added to the portfolio. Use of indexes (where applicable): Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of direct comparison. The market volatility, liquidity and other characteristics of the Fund s portfolio composition are materially different from securities listed on public market indices. Market index information was compiled from sources that HQ Capital believes to be reliable. No representation or guarantee is made hereby with respect to the accuracy or completeness of such data. Index definitions (where applicable): The MSCI AC (All Country) Asia Pacific Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed and emerging markets in the Pacific region. The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. HQ Capital Insights, Nr. 2, 217
CHINA S CORPORATE LANDSCAPE
Sinology by Andy Rothman October 1, 214 a China has many unprofitable and highly indebted companies, but these are largely state-owned firms which dominate only a handful of industrial sectors. a The privately
More informationNavigating Asian equities in 2017
December 2016 16 Navigating Asian equities in 2017 With Christmas around the corner, it s almost the end of 2016. How would investors depict 2016? Surprised? Startled? Shocked? Few would argue that Trump
More information2017 Mid-Year Commercial Real Estate Outlook for Asia Pacific
2017 Mid-Year Commercial Real Estate Outlook for Asia Pacific REAL ASSETS REAL ESTATE INVESTING TEAM INVESTMENT INSIGHT 2017 The global macroeconomic landscape continues its shift away from highly accommodative
More information-7.9% -11.1% -8.6% 14.1x Industrial Average Index Japan Nikkei 225
26 August 2015 It Is Another Hard Time For Investors Global stock markets have dropped sharply in the past few weeks, reflecting that investors are nervous about the possible collapse of the Chinese economy,
More informationCiti OpenInvestor SM. The Game Changer for Hong Kong. Insights Institutional Investors
Citi OpenInvestor SM The Game Changer for Hong Kong Insights Institutional Investors 2 Citi OpenInvestor SM The Game Changer for Hong Kong Stewart Aldcroft Senior Advisor, Investor Services, Asia Pacific
More informationHow Successful is China s Economic Rebalancing?*
How Successful is China s Economic Rebalancing?* C.P. Chandrasekhar and Jayati Ghosh Over the past decade, there has been much talk of global imbalances, and of the need to correct them in an orderly way.
More informationTHE MATURITY OF EMERGING ECONOMIES AND NEW DEVELOPMENTS IN THE GLOBAL ECONOMY
1 THE MATURITY OF EMERGING ECONOMIES AND NEW DEVELOPMENTS IN THE GLOBAL ECONOMY THE MATURITY OF EMERGING ECONOMIES AND NEW DEVELOPMENTS IN THMY Tomohiro Omura Industrial Research Dept. II Mitsui Global
More informationInvestment. Insights. Emerging Markets. Invesco Global Equity. A 2012 outlook
Investment Insights Invesco Global Equity Emerging Markets A 2012 outlook Ingrid Baker Portfolio Manager Invesco Global Equity Many investors have watched from the sidelines as emerging market equities
More informationNavigating the China market - Sustaining high growth through innovations
Navigating the China market - Sustaining high growth through innovations Louis Cheung Group President Sept 2010 P.0 May, 2010 Summary Ⅰ THE CHINA GROWTH STORY Despite recent volatility, the Chinese market
More informationPresentation Global private equity trends
Presentation Global private equity trends Alex Scott Partner Pantheon Ventures Global Private Equity Trends Alex Scott July 2018 Hitting the headlines IPOS ARE DWINDLING, SO IS THE NUMBER OF PUBLIC COMPANIES
More informationA CASE FOR GLOBAL LISTED REAL ESTATE SECURITIES IN A MIXED ASSET PORTFOLIO
A CASE FOR GLOBAL LISTED REAL ESTATE SECURITIES IN A MIXED ASSET PORTFOLIO MAY 2015 EXECUTIVE SUMMARY Access to Growing Global Markets The number of listed real estate companies world-wide continues to
More informationPart 3: Private Equity Strategies
Private Equity Education Series Part 3: Private Equity Strategies Reports in this series Report Highlights Page Part 1: What is Private Equity (PE)? Part 2: Investing in Private Equity Part 3: Private
More informationA TALE OF TWO CHINESE CONSUMERS
A TALE OF TWO CHINESE CONSUMERS By Jeff Walters and Youchi Kuo Despite the well-publicized slowdown in economic growth, overall consumer sentiment in China can still be described as cautiously optimistic.
More informationAsian Insights Third quarter 2016 Asia s commitment in policies and reforms
Asian Insights Third quarter 2016 Asia s commitment in policies and reforms One of the commonalities between most Asian governments is the dedicated commitment they have in using policies and initiatives
More informationChinese Economy. YU Jianwei Commercial Counsellor Chinese Consulate General in Toronto
Chinese Economy YU Jianwei Commercial Counsellor Chinese Consulate General in Toronto Chinese Economy Slowing down or Picking up Growth 7.7% (first 3 months) 7.5% in April-June Slowest in 13 years Economic
More informationSummary. Chinese equities remained mired in a bear market, with the Shanghai composite losing nearly
Summary Editor: Tristan Zhuo Senior Economist Phone: +852 2826 6193 Email: tristanzhuo@bochk.com In spite of fixed asset investment, industrial production, and exports all missing their targets, China
More informationChina: Double, Double Toil and Trouble/Fire Burn, and Cauldron Bubble?
China: Double, Double Toil and Trouble/Fire Burn, and Cauldron Bubble? September 15, 2015 by Andy Rothman of Matthews Asia September 10, 2015 China s economy is seemingly in turmoil. Markets are down,
More informationHSBC PRIVATE BANK 2017 INVESTMENT OUTLOOK: GO WEST OR EAST. Bond Yield to Come Down, Focus on Growth Opportunities in the US & Asia
News Release HSBC PRIVATE BANK 2017 INVESTMENT OUTLOOK: GO WEST OR EAST Bond Yield to Come Down, Focus on Growth Opportunities in the US & Asia Following a surprising and turbulent 2016, global financial
More informationFinancing the U.S. Trade Deficit
Order Code RL33274 Financing the U.S. Trade Deficit Updated January 31, 2008 James K. Jackson Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division Financing the U.S.
More informationINDUSTRY OVERVIEW SOURCE OF INFORMATION
3rd Sch3 The information presented in this section is, including certain facts, statistics and data, derived from the CIC Report, which was commissioned by us and from various official government publications
More informationOn Abenomics and the Japanese Economy. Motoshige Itoh Member, Council on Economic and Fiscal Policy and Professor, University of Tokyo
On Abenomics and the Japanese Economy Motoshige Itoh Member, Council on Economic and Fiscal Policy and Professor, University of Tokyo The purpose of this brief overview is to summarize some of the major
More informationTHE U.S. MIDDLE MARKET
THE U.S. MIDDLE MARKET An alternative source of income, growth and diversification ALTERNATIVE THINKING FS Investment Solutions, LLC (member FINRA/SIPC) is an affiliated broker-dealer that serves as the
More informationAsian Insights What to watch closely in Asia in 2016
Asian Insights What to watch closely in Asia in 2016 Q1 2016 The past year turned out to be a year where one of the oldest investment adages came true: Sell in May and go away, don t come back until St.
More informationPwC M&A 2012 Review and 2013 Outlook 30 January 2013
M&A 212 Review and 213 Outlook 3 January 213 China Beijing Advisory Leader: Nelson Lou Northern China Transaction Services Leader : Leon Qian Foreword explanation of data shown in this presentation (1
More informationMorgan Stanley Financial Services Conference
Morgan Stanley Financial Services Conference Glenn Youngkin, Managing Director and Chief Operating Officer June 2012 Important Information This presentation has been prepared by The Carlyle Group L.P.
More informationGood morning everyone. I d like to spend the next twenty minutes or so giving you our perspective on Legal & General s strategy and prospects.
Merrill Lynch Conference 1 st October 2009 Competing in the New Normal Good morning everyone. I d like to spend the next twenty minutes or so giving you our perspective on Legal & General s strategy and
More informationMoney and Banking. Lecture XII: Financial Risks in the Chinese Economy. Guoxiong ZHANG, Ph.D. December 5th, Shanghai Jiao Tong University, Antai
Money and Banking Lecture XII: Financial Risks in the Chinese Economy Guoxiong ZHANG, Ph.D. Shanghai Jiao Tong University, Antai December 5th, 2017 Source: http://editorialcartoonists.com Road Map Foundations
More informationCHINA S DIRECTION IN What is the Risk of a Debt Crisis?
Sinology by Andy Rothman January 18, 2018 a In 2018, I expect China s economy to return to the long-term trend of gradual deceleration, while remaining one of the world s fastestgrowing economies. a China
More informationIn contrast to developed and highly competitive markets like the US and Europe, where private capital is often
Africa: The Opportunity At Hand Dan POgue & Chris Keller, CFA May 2014 Executive Summary In contrast to developed and highly competitive markets like the US and Europe, where private capital is often used
More informationDEMYSTIFYING THE MARKET STORM: A FACTOR PERSPECTIVE
DEMYSTIFYING THE MARKET STORM: A FACTOR PERSPECTIVE Many market observers could see signs of a coming storm long before stock prices started to slide. Among these indicators were outflows from the large
More informationFEG INSIGHT WHAT IS YOUR PRIVATE EQUITY RISK APPETITE? NOVEMBER NATHAN C. WERNER, CFA, CAIA Senior Vice President Director of Private Equity
FEG INSIGHT NOVEMBER 2017 WHAT IS YOUR PRIVATE EQUITY RISK APPETITE? NATHAN C. WERNER, CFA, CAIA Senior Vice President Director of Private Equity As we approach the end of the year, the avalanche of holiday
More informationAPW Partners: Insight Greece & China: Investment Portfolio Implications
APW Partners: Insight Greece & China: Investment Portfolio Implications Lessons learned from Greece The recent volatility in global financial markets sparked by the Greek debt negotiations is a reminder
More informationPomona Investment Fund
Pomona Investment Fund A Registered Fund Structured To Provide Streamlined Access To Private Equity An investor should consider the investment objectives, risks, charges and expenses of the Fund(s) carefully
More informationKorean Economic Trend and Economic Partnership between Korea and China
March 16, 2012 Korean Economic Trend and Economic Partnership between Korea and China Byung-Jun Song President, KIET Good evening ladies and gentlemen. It is a great honor to be a part of this interesting
More informationG L O B A L R E A L E S T A T E I N V E S T I N G
Insights on... G L O B A L R E A L E S T A T E I N V E S T I N G T H E A D V A N T A G E S O F G O I N G G L O B A L Research Series Volume 1 June 2008 Philip S. DeSantis Senior Investment Product Manager
More informationActive M Emerging Markets Equity Fund (NMMEX) (Formerly known as Multi-Manager Emerging Markets Equity Fund)
NORTHERN FUNDS Active M Emerging Markets Equity Fund (NMMEX) (Formerly known as Multi-Manager Emerging Markets Equity Fund) 2Q 2018 Performance Review June 30, 2018 Please carefully read the prospectus
More informationGAUGING GLOBAL GROWTH
LPL RESEARCH WEEKLY ECONOMIC COMMENTARY KEY TAKEAWAYS The IMF will release its World Economic Outlook this week, which will garner plenty of attention in the financial media. As first quarter earnings
More informationINSTITUTE. China A-Shares: Key Issues for Investors to Consider. Research
INSTITUTE Research June 2018 China A-Shares: Key Issues for Investors to Consider KEY ELEMENTS China is taking steps to open up its securities markets to a wider range of non-chinese institutional investors,
More informationIS CHINA LOSING CONTROL OF ITS ECONOMY AND CURRENCY?
For professional investors 20 April 2016 1 CHI TIME IS CHINA LOSING CONTROL OF ITS ECONOMY AND CURRENCY? When you wake up every day, you have two choices. You can either be positive or negative; an optimist
More informationThe China Opportunity in the Post-Crisis Era
The China Opportunity in the Post-Crisis Era Louis Cheung Group President May 2010 P.0 May, 2010 Summary Ⅰ THE CHINA GROWTH STORY Despite recent volatility, the Chinese market remains very attractive Fundamentals
More informationMarket E-digest October 2018 Issue
Market E-digest October 2018 Issue A) Emerging Markets: Diminishing Risks VS. Fears Emerging market (EM) economies are facing a number of insecurities. Investors have grown increasingly concerned about
More informationMarket Bulletin. 4Q17 earnings update: Let s talk about taxes. January 31, In brief. Safety in earnings
Market Bulletin January 31, 2018 4Q17 earnings update: Let s talk about taxes In brief While higher volatility may be on the horizon, healthy earnings growth should prevent minor pullbacks from becoming
More information2019 Annual Outlook Volatility & Opportunities in the Late Stage Bull Market
2019 Annual Outlook Volatility & Opportunities in the Late Stage Bull Market Asia Pacific Wealth Management December 2018 INVESTMENT PRODUCTS: NOT A BANK DEPOSIT. NOT GOVERNMENT INSURED. NO BANK GUARANTEE.
More informationGlobal Markets. CHINA AND GLOBAL MARKET VOLATILITY.
PRICE POINT August 015 Timely intelligence and analysis for our clients. Global Markets. CHINA AND GLOBAL MARKET VOLATILITY. EXECUTIVE SUMMARY Eric Moffett Portfolio Manager, Asia Opportunities Strategy
More informationSPECIAL REPORT. TD Economics ASSESSING CHINA S QUEST FOR ECONOMIC REBALANCING
SPECIAL REPORT TD Economics ASSESSING CHINA S QUEST FOR ECONOMIC REBALANCING Highlights Chinese spending on fixed investments have climbed to 8% of GDP from roughly % a decade ago. This has come at the
More informationSinology KEY QUESTIONS FOR CHINA INVESTORS IN 2015 PART II. by Andy Rothman. Why Do I Keep Saying China Won t Ease this Year?
Sinology by Andy Rothman February 19, 2015 a In the second of a threepart series, Sinology answers some of the key questions investors should be asking about China in 2015. a We are witnessing the odd
More informationA-SHARES TANKED. WHAT S NEXT?
Chi Time FOR WHOLESALE INVESTORS 11 July 2018 A-SHARES TANKED. WHAT S NEXT? Panic causes tunnel vision. Calm acceptance of danger allows us to more easily assess the situation and see the options. Simon
More informationMANAGED FUTURES PROVE ADVANTAGEOUS IN A VOLATILE 2015
MANAGED FUTURES PROVE ADVANTAGEOUS IN A VOLATILE 2015 Long-term trend following may smooth out the new year In 2015, the financial markets challenged even the most seasoned investors with increased volatility
More informationPension reform paves the way for the targetdate funds market in Mainland China
Invesco Investment Insights Pension reform paves the way for the targetdate funds market in Mainland China November 2018 Nixon Mak Head of Hong Kong Pensions and Solutions Strategist, APAC, Invesco Key
More informationThe Case for Emerging Markets Debt: Stable Fundamentals Support Potential Yield Opportunity
The Case for Emerging Markets Debt: Stable Fundamentals Support Potential Yield Opportunity SEPTEMBER 214 EMERGING MARKETS DEBT TEAM EMD investable markets are now roughly three times the size of the U.S.
More information26 Nov Executive Summary. Analyst Hillary Ho Li Ling
Analyst Hillary Ho Li Ling +6565311517 hillaryho@phillip.com.sg Executive Summary United States: We maintain our stance that QE2 will not make a huge difference to economic conditions. Growth will continue
More informationThe next 15 years Is there a New Normal ahead? Delaware Investments Presentation. Richard C Marston Wharton School, University of Pennsylvania
The next 15 years Is there a New Normal ahead? Delaware Investments Presentation Richard C Marston Wharton School, University of Pennsylvania Outline 1. Is there a New Normal ahead for stocks? 2. Is the
More informationABF Pan Asia Bond Index Fund (2821) An ETF listed on the Stock Exchange of Hong Kong
Important information: ABF Pan Asia Bond Index Fund ( PAIF ) is an exchange traded bond fund which seeks to provide investment returns that corresponds closely to the total return of the Markit iboxx ABF
More informationShandong Province M&A Review and Outlook
www.pwccn.com Shandong Province M&A Review and Outlook 014016 Foreword explanation of data shown in this presentation (1/) The data presented in this report is provided by ZeroIPO, and Wind Information,
More informationInvestor Presentation. October 31, 2017
Investor Presentation October 31, 2017 Notices and Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of
More informationMARKET COMMENTARY. Horizon Asia Opportunity Q Commentary. July Horizon Kinetics LLC
Horizon Asia Opportunity Q2 2016 Commentary July 2016 2016 Horizon Kinetics LLC In the second quarter of 2016, the Horizon Asia Opportunity Institutional Composite ( Strategy ) rose 1.1%, net of fees,
More informationCAPITARETAIL CHINA TRUST (CRCT)
CAPITARETAIL CHINA TRUST (CRCT) First and Only China Shopping Mall S-REIT Tapping into China s Consumption Growth 30 and 31 March 2012 Important Notice and Disclaimer This presentation may contain forward-looking
More information2017 European Private Equity Activity
Disclaimer The information contained in this report has been produced by Invest Europe, based on data collected as part of the European Data Cooperative (EDC) and other third party information. While Invest
More informationREADING 20: DREAMING WITH BRICS: THE PATH TO
READING 20: DREAMING WITH BRICS: THE PATH TO 2050 Dreaming with BRICs: The Path to 2050, by Dominic Wilson and Roopa Purushothaman, reprinted from Global Economics Paper Number 99. Copyright 2003. Reprinted
More informationEarnings Release 2Q15
Earnings Release 2Q15 Earnings Release 2Q15 2 Key metrics Credit Suisse (CHF million, except where indicated) Net income/(loss) attributable to shareholders 1,051 1,054 (700) 0 2,105 159 of which from
More informationTime to Invest in Emerging Markets
Time to Invest in Emerging Markets Emerging Markets Report 2014 HUGE OPPORTUNITIES IN DIRT CHEAP EMERGING MARKETS With the S&P500 making new all-time highs and with valuations nearing expensive levels,
More informationVenture Capital 4% Strategy. Mega/Large Buyout 29% Highlights from the 2016 GP Dashboard include:
GP Dashboard We are pleased to present Hamilton Lane s GP Dashboard, which captures the opinions and expectations of general partners from around the world and offers insight into where the GP community
More informationOctober Stock Indexes September 2009 Market Indexes September S&P 500 Index +3.6% +17.0% HFRX Global Hedge Fund Index +2.2% +11.
October 2009 Dear Investor, In September, stocks continued modestly higher, both in the US and globally. There have been a few notable exceptions to the gains, as stock indexes in China and Japan (among
More informationECONOMIC PROSPECTS FOR HONG KONG IN Win Lin Chou, ACE Centre for Business and Economic Research, Hong Kong
ECONOMIC PROSPECTS FOR HONG KONG IN 2015-16 Win Lin Chou, ACE Centre for Business and Economic Research, Hong Kong I. The Current Trends Real gross domestic product (GDP) in Hong Kong increased 2.8 percent
More informationThe Impacts of RMB Cross-border Settlement on China's Economy 1
Policy discussion No. 2016.002 Feb.4 2016 XU Qiyuan xuqiy@163.com The Impacts of RMB Cross-border Settlement on China's Economy 1 In Tokyo, I have frequently been asked about two renminbi (RMB) internationalization
More informationThe evolution of U.S. buyouts from a cottage investment business into a
U.S. Small Buyouts: Private Equity s Best Kept Little Secret FEBRUARY 2017 The evolution of U.S. buyouts from a cottage investment business into a multi-trillion-dollar industry has created what we believe
More informationPerformance by Retirement Benefits Schemes in Kenya & Cytonn Weekly #10_2019
Performance by Retirement Benefits Schemes in Kenya & Cytonn Weekly #10_2019 Focus of the Week The Retirement Benefits Industry plays a huge role in the economy. According to the Organization for Economic
More informationDavis International Fund
DIF ANNUAL REVIEW 2019 Davis International Fund Update from Portfolio Manager Danton Goei The Equity Specialists Davis International Fund Annual Review 2019 Investment Results Davis International Fund
More informationHong Kong Trip Report
Hong Kong Trip Report Hong Kong, February 25 26, 2016 Executive Summary The outlook for both global economic growth and growth in China remains murky, but the hedge fund community in Hong Kong anticipates
More informationManagement Discussion and Analysis Financial Review
% 8 6 4 2 0 Growth of Global and Chinese Economy (2013 to 2017) Growth rate of global economy Growth rate of Chinese economy 2013 2014 2015 2016 2017 Source: International Monetary Fund (IMF), National
More informationFinancing the U.S. Trade Deficit
Order Code RL33274 Financing the U.S. Trade Deficit Updated September 4, 2007 James K. Jackson Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division Financing the U.S.
More informationMARKET COMMENTARY. Horizon Asia Opportunity Q Commentary. February Horizon Kinetics LLC
Horizon Asia Opportunity Q4 2017 Commentary February 2018 2018 Horizon Kinetics LLC In the fourth quarter of 2017, the Horizon Asia Opportunity Institutional Composite (the Strategy ) gained 7.1%, net
More informationAustralian Equity IMPROVING OUTLOOK FOR A TRANSITIONING ECONOMY
FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. PRICE POINT December 2015 Timely intelligence and analysis for our clients. Australian Equity IMPROVING OUTLOOK FOR A TRANSITIONING ECONOMY
More informationAutomotive transactions and trends 1H16
Automotive transactions and trends 1H16 Global automotive mergers and acquisitions review Produced by Global Markets EY Knowledge Contents Executive summary 01 Analysis by deal sizes Cross-border deals
More informationFinancing the U.S. Trade Deficit
James K. Jackson Specialist in International Trade and Finance November 16, 2012 CRS Report for Congress Prepared for Members and Committees of Congress Congressional Research Service 7-5700 www.crs.gov
More informationGermany The Future of HNWIs to 2016: Wealth in the Powerhouse of Europe
Germany The Future of HNWIs to 2016: Wealth in the Powerhouse of Europe China The Future of HNWIs to 2015: Opportunities for Wealth Managers and Private Banks Publication date: May, 2012. WealthInsight.
More informationPutting China s Capital to Work The Value of Financial System Reform
McKinsey Global Institute Putting China s Capital to Work The Value of Financial System Reform Susan Lund, Senior Fellow McKinsey Global Institute October 25, 2006 KEY MESSAGES China has made steady advances
More informationUS PE / VC Benchmark Commentary Quarter Ending March 31, 2017
US PE / VC Benchmark Commentary Quarter Ending March 31, 2017 Overview US private equity and venture capital funds had a good first quarter in 2017, as indicated by the Cambridge Associates LLC benchmark
More informationTriton Pacific Investment Corporation A Private Equity Business Development Company
Triton Pacific Investment Corporation A Private Equity Business Development Company Disclaimers and Risk Disclosure This is not an offer to sell nor a solicitation of an offer to buy the securities described
More informationEmerging market central banks investment strategies: Tailwind for the euro?
Economic Research Allianz Group Dresdner Bank Working Paper No.:38, 11.04.2005 Autor: Dr. R. Schäfer Emerging market central banks investment strategies: Tailwind for the euro? The euro has appreciated
More informationCOUNTRY REPORT CHINA 2008
COUNTRY REPORT CHINA 2008 1. Economic and financial background 1.1 China's economy has maintained steady and rapid growth in 2007. For the year ending 2007, gross domestic product (GDP) grew at a pace
More information2010 China VC/PE Industry Survey Report
2010 China VC/PE Industry Survey Report www.cvca.org.cn The China Venture Capital and Private Equity Association ( CVCA ), incorporated in the middle of 2002, is a member-based trade organization established
More informationProduct Key Facts Franklin Templeton Asia Fund Series Franklin Select Global Multi-Asset Income Fund Last updated: April 2018
Product Key Facts Franklin Templeton Asia Fund Series Franklin Select Global Multi-Asset Income Fund Last updated: April 2018 This statement provides you with key information about this product. This statement
More informationPrincipal Asia Pacific High Dividend Equity Fund Grasp the Chance for Yielding Growth and Income! August 2018
Principal Prosperity Series Principal Asia Pacific High Dividend Equity Fund Grasp the Chance for Yielding Growth and Income! August 218 Important Notes 1. The Principal Asia Pacific High Dividend Equity
More informationFriday, February 21, Dear Valued Clients and Friends,
Friday, February 21, 2014 Dear Valued Clients and Friends, Another week behind us, and with it, the vast majority of earnings season is complete (though some results will continue to trickle in). I spend
More informationBArings VIEWPOINTS February 2018
BArings VIEWPOINTS February 2018 Highlights Investor appetite for Emerging Markets (EM) equities has strengthened after several challenging years. We believe the strong earnings outlook, attractive valuations
More informationFrankfurt am Main 25 November Capital Markets Outlook 2016: Broad diversification key to stable portfolios
Release Frankfurt am Main 25 November 2015 Capital Markets Outlook 2016: Broad diversification key to stable portfolios Deutsche Bank expects global economy to grow by nearly 3.5 percent Central banks
More informationEye on China: Private Equity Investments in China
Eye on China: Private Equity Investments in China Private Equity Investments in China was the topic of discussion during the May 7, 2008 presentation of the Foley Executive Briefing Series. Foley & Lardner
More informationKey Insights. China Macro Pulse
MACRO REPORT China Economy Update March 2015 Key Insights Monica Defend Head of Global Asset Allocation Research Qinwei Wang Economist Global Asset Allocation Research Economic Conditions: China s macro
More informationFund Management Diary
Fund Management Diary Meeting held on 11 th December 2018 Losing Momentum After a strong start to the year, global growth peaked in the first of 2018 and doesn t look like regaining momentum. Trade tensions
More informationAugust 2017 The information contained in this publication is not intended as investment advice or recommendation. Non contractual document.
Demystifying Chinese Bond Investing August 2017 The information contained in this publication is not intended as investment advice or recommendation. Non contractual document. Chinese bonds have been in
More informationLatin American Quarterly Outlook JULY 2011
Latin American Quarterly Outlook JULY 2011 LATIN AMERICA Real Estate Outlook Key Economic Themes Almost three years after the peak of the global crisis, Latin America has two contrasting stories: Mexico
More informationNewsletter for June 2016
Newsletter for June 2016 This month we are going back to Jeetu Panjabi, our regular guest contributor. Jeetu has a valid and interesting insight on how the global nominal GDP growth had slowed down since
More informationManulife Asset Management launches Asia Pacific Income and Growth Segregated Portfolio
For Immediate Release May 7, 2014 Important Information: Manulife Advanced Fund SPC - Asia Pacific Income and Growth Segregated Portfolio (the "Fund") invests in equity securities and fixed income securities,
More informationEmerging Markets: Broader opportunities and declining systematic risk
June 2013 Emerging Markets: Broader opportunities and declining systematic risk Favorable outlook for emerging markets equity and debt Alexander Muromcew, Portfolio Manager, Emerging Markets Equity Strategy
More informationGlobal Financial Institutions Group
Global Financial Institutions Group Lim Lay Wah Head, Group Financial Institutions UOB Greater China Corporate Day 31 August 1 September 2015 Disclaimer: This material that follows is a presentation of
More informationThe International Business Academy in Conjunction with. International Journal of Business & Management Research. IJBMR ISSN
The International Business Academy in Conjunction with International Journal of Business & Management Research. IJBMR ISSN 1938 0429 And The American International Institute USA Invites you to the 3rd
More informationAsian Realities Behind the Trade
Asian Realities Behind the Trade Very topical, as the threat of trade wars emerges. Robert argues for minimal damage, but, nevertheless, the prospect is not positive. Continually apparent that 1 billion
More informationIs Your Portfolio Prepared
Investment Expertise. Tangible Results. Is Your Portfolio Prepared FOR AN EQUITY MARKET DOWNTURN? PAGE 02 MARKET DOWNTURN TODAY S MARKET ENVIRONMENT The key to a successful insurance investment management
More informationMarket Insight Economy and Asset Classes December Oil Prices Downtrending: The Real Global Economic Stimulus
Market Insight Economy and Asset Classes December 2014 Oil Prices Downtrending: The Real Global Economic Stimulus 2 Equities Markets Feature In Citi analysts view, the expansion phase the US are enjoying
More information