Infra bank seeks investment managers
The China-led Asian Infrastructure Investment Bank is looking to hire fixed-income management companies to help invest its billion of dollars of spare funds. But don’t bother applying unless your company has some serious credentials.
The multilateral lender posted a help-wanted advertisement on its website for investment managers. It prefers one who has managed at least $100 billion in fixed-income portfolios, has beaten the benchmark bond index for three to five years and has 10 years of fixed-income management experience. Those are among several credentials listed by the bank, although not all are required.
“Chinese institutions may find it difficult to get in, because they lack the type of experience needed,” said Zhou Hao, an economist at Commerzbank AG in Singapore. Large US and European asset managers would likely be eligible, Zhou said.
The high bar could spell opportunity for global players such as Blackrock Inc, Vanguard Group Inc and Pacific Investment Management Co, which stand to benefit.
And if those criteria aren’t stringent enough, the bank also wants to know how well you manage. The ad seeks candidates with an information ratio — a technical measure of actively managed returns per unit of risk — of at least 0.5 for 3 to 5 years.
The requirements on returns are high but “not impossible” for big international funds, said Du Yang, Shanghai-based managing director of Yaozhi Asset Management International Ltd. The key will be how to match those with AIIB’s investment policies and rules, he added.
The AIIB hasn’t decided which types of fixed-income assets will be included, but the investment policy will be “prudent and conservative,” like at other multilateral development banks, according to the bank. While fees might not be very high, the opportunity would be good for investment managers to build a reputation, Zhou said.
The bank certainly has business for qualified candidates. It expects paid-in capital of $7 billion to $8 billion by the end of 2016, Senior Communication Officer Song Liyan said in an email. “The allocation to external asset managers will be a portion of that, the size of which has not been determined yet,” he said.
In contrast, AIIB has only approved over $800 million of loans to fund projects in Asian countries since beginning operations in January. It aims to lend $1.2 billion in 2016, President Jin Liqun said earlier this year.
Chinese institutions may find it difficult to get in, because they lack the type of experience needed.” Zhou Hao, an economist at Commerzbank AG in Singapore