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Hagen

Matthews Asia: Evergrande’s difficulties are an idiosyncratic, not a systematic risk of China’s bond market

Teresa Kong, Matthews Asia

The plight of China’s largest property developer, China Evergrande Group, which appears to be struggling to service interest payments to two creditor banks, has not only caused turmoil in the bond markets. “Evergrande’s plight raises critical issues about investing anywhere in emerging markets, not just China,” says Teresa Kong, responsible for all fixed income strategies at Asia specialist Matthews Asia. The Evergrande saga therefore underlines the importance of conducting thorough due diligence on three aspects of good corporate governance when making bond investments, namely accounting, legal and regulatory requirements, she explains in her latest commentary.

 

Matthews Asia: “China’s regulation is doing just what the rest of the world is thinking about but hasn’t gone around to implement.”

Andy Rothman, Matthews Asia

The Chinese government’s intervention in the market for private education providers, as well as its intervention in the planned listings of ride-hailing giant Didi and Ant Group on US stock exchanges, have worried investors worldwide. Many now fear further regulation that could negatively impact listings of Chinese companies. Andy Rothman (pictured), investment strategist at Asia specialist Matthews Asia, and his colleague and Chief Investment Officer Robert Horrocks believe these concerns are only partially justified, as they explain in the following interview.

Read the full commentaries from Andy Rothman here and from Robert Horrocks here.

 

GFC Podcast Episode 8: Vegan piglet farming – and how to dispel ESG myths

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ESG up and down – not a week goes by without some financial provider launching a supposedly sustainable fund, unit-linked insurance policy, ETF or property with the three magic letters in its name. With so much (over)supply – and standards only gradually developing – transparency is key. Based on the observation of how much uncertainty currently prevails in the ESG world, among investors and providers alike, Nicolas Schild and Paula Singliarova from the German-British investment house Arabesque Asset Management launched an unusual newsletter in the summer of 2020: it is entitled “Arabesque’s Weekly Dose of ESG“, questions buzz words and headlines on the basis of data-supported facts, and is sent as personalised emails to 500 interested readers in Germany, Switzerland and the UK so far. Nicolas Schild explains in this interview with GFC (not the ‘Global Financial Crisis’) Podcast why the newsletter asks the same three questions every week, why it is not integrated into Arabesque’s Corporate Communications and what vegan piglet farming has to do with it.

This podcast is in German. Length of the podcast: 13:54 minutes.

Article about the future of UK as a financial centre post-Brexit on FondsTrends.lu

The UK government and the British financial industry are currently desperately looking for ways to keep the UK an attractive international financial centre post-Brexit. Indeed, since the EU referendum in June 2016, but especially in recent months, the financial industry on the island has lost a lot of staff, companies and assets. Asset management has been hit hardest, as Hagen Gerle explains in this article for FondsTrends, the information platform of Hauck & Aufhäuser Fund Services about current trends and topics in the fund business: Financial Centre UK Post-Brexit: Searching for A New Meaning (article available in German only).

Hazelview Investments: “Mobile operators will need to work with mobile REITs to expand their networks”

The strong growth of the global mobile industry will increase the need for infrastructure for the new 5G mobile standard. This will be triggered by the robust increase in data consumption and traffic resulting from the continued roll-out of 5G mobile technology. This will benefit providers of listed real estate investment trusts (REITs) of mobile tower operators already this year, explain the REITs specialists at Hazelview Investments (formerly Timbercreek Investments) in their latest market commentary.

 

GFC podcast Episode 7: ESG, SFDR and the risk of “Impact Washing”

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The “Sustainable Finance Disclosure Regulations (SFDR)“ which has been in force for almost three months now, reveals it: The number and volume of investment funds that either take sustainability criteria into account (article 8) or even want to improve them (article 9) are on the rise.  Is it all a sham – or is the fund industry really becoming more sustainable? And what do the, sometimes rather meager data and parameters such as the new “Principle Adverse Impact” indicators reveal? We talked about this with Christina Böck, partner at international strategy consultancy INDEFI, for the new episode of GFC (not the ‘Global Financial Crisis’) Podcast.

This podcast is in German. Length of the podcast: 19:42 min.

Survey: The biggest challenges for foreign fund companies in Germany in 2021

Chart showing the biggest challenges for foreign asset managers in Germany 2021

Germany’s decentralised structure with its different financial centres, access to distribution partners, fund-related regulation and Working from Home (WfH) as well as specific requirements from clients are the biggest challenges for foreign fund companies in the German market. Compared to the respective home markets of the asset managers, regulation in Germany causes considerably more work. These are the main findings of the survey “What hurdles do foreign fund houses have to overcome in the German market?” – the second after 2020 – which was conducted by the specialised communications consultancy Gerle Financial Communications (GFC).

Representatives of 18 companies that work for or provide services to foreign fund houses, mainly in Sales, took part in the online survey in February and March of this year. Participating firms came from Europe (twelve firms), North and South America (five) and Asia (one firm). Eight of the participants (44%) have been present on the German market for more than five years, three (17%) between three and five and four (22%) between one and three years. Three companies (17%) have only become active on the German market in the past twelve months. Continue Reading

Asset Manager Survey 2021: What are the biggest hurdles for foreign asset managers coming to the German market?

What are the biggest hurdles for foreign investment companies in the German market? Is it specific requirements of institutional clients or complex German regulations? Switch to Work from Home or cautiously returning to the office? Or is it finding the right sales contacts or pushing ahead with digitisation? The following online survey – the second after 2020 – seeks answers to such central questions. It is aimed at foreign asset managers in Germany who have only been represented here for a few years or are still planning to enter the German speaking market.

The questionnaire consists of 12 questions, so answering shouldn’t take longer than 10 to 15 minutes. The (anonymous) results of the survey can be requested by all participants at the end of the survey with no further strings attached. The survey is open until mid of March 2021. To access the link to the survey (in English), please click here.

GFC Podcast episode 6: The British financial industry post Brexit

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The British financial industry post Brexit: Hoping for equivalence – or move to the EU straight away? That is the topic of the latest, 6th episode of GFC (not the ,Global Financial Crisis‘) Podcast. The Brexit deal announced by the British government and the EU Commission on Christmas Eve largely excludes services – and with it the powerful British financial services industry with its immense share in economic output, tax revenue and employment. Especially for the British fund industry, which manages by its own record more than GBP 8.5 trillion in assets, a treaty with the EU about the future of financial services post Brexit is essential. However, the European Union doesn’t seem to be in a hurry with that … and every day without an agreement drives more business, firms, and staff to Europe – and unsettles British investment managers increasingly. You can find more information in our article in German or English.

This podcast is in German.

Length of this podcast: 14:20 min.

British financial sector post Brexit: hoping for equivalence – or move to the EU straight away?

The United Kingdom and the European Union want to sign a “Memorandum of Understanding” by the end of March, which should determine how the financial services industry will proceed after Brexit. While the UK hopes that its regulations will also be recognised as equivalent on the continent, a level playing field seems to be more important for the EU. Every day without an agreement drives more business, firms, and staff to Europe – and unsettles British investment managers increasingly.

Things are not looking good for the UK as an international financial hub. While the Brexit deal may have been an unexpected Christmas present for some Brits, for many it is turning into a national tragedy. Enervated hauliers, angry fishermen and ripped-off online shoppers from the United Kingdom (UK) may soon be joined by relocating employees in financial services firms. The sales manager of a London investment boutique put it succinctly in a phone call with me the other day: “Down the line, if you want to work in the EU, you need the local licence.” Ergo, his employer is intensively looking for a location on the European mainland.

Considerations, like those of this asset manager with its tens of billions in assets under management, are being made by more and more investment houses on the Thames that do not (yet) have a branch in the European Union (EU). The post-Brexit period is a grey area for many of them as long as there is no separate agreement between the UK and the EU. But that may be a long time coming. Continue Reading