OMGI is outsourcing management of the $74.7m China Equity Fund, currently managed by Joshua Crabb and its Asian equity team, to Ping An Asset Management.
Vincent Che and Eddie Lau, who have a combined 22 years’ experience in investment management, will manage the fund.
The fund objective and policy will not change.
The fund is third quartile over one, three and five years, but has still marginally outperformed the IA China/Greater China over three and five years, delivering investors 59.5% and 78% respectively, compared to 58.7% and 77.8% in the sector over the same periods, according to FE.
Architas investment director Adrian Lowcock said local expertise would be beneficial for the fund and outsourcing the smaller portfolio could help lead manager Crabb focus on the $412.86m Asian Equity Income fund and the $175.39m Pacific Equity funds.
He added: “This could be a way of adding to their resource to an extent, because they may be able to share some ideas if you like. [Crabb] should at least be able to get a look through on what is happening on the fund.”
An OMGI spokesperson said what Ping An chose to do with their proprietary information is their choice, including choosing to share it with who they like.
Architas is currently “quite positive” on China, Lowcock said.
“We’re not overly concerned with Chinese debt at the moment; we think it’s manageable. Non-performing loans are rising, but they’ve got the savings to finance that. The political noises coming out of China are all about improving the quality of growth and slowly, but gently addressing the shadow banking system and the state-owned enterprises.”
Chinese economy opens up
While OMGI said the fund is being outsourced to Hong Kong, rather than China, Tilney managing director Jason Hollands said the move it still significant given Ping An is a major mainland Chinese financial services group, headquartered in Shanghai.
However, he said there was comfort from a regulatory standards point of view that the outsourcing was taking place via a Hong Kong subsidiary.
Lowcock described the move as a sign of China opening up its economy and its financial services sector.
OMGI managing director Warren Tonkinson described Ping An as one of the most established specialist Chinese asset managers. “We believe this is a significant coup for investors,” Tonkinson said.
OMGI told Portfolio Adviser that the previous manager of the fund, Diamond Lee, used to run the fund from its Hong Kong subsidiary, before he departed in July 2016.
