In­fra bank seeks in­vest­ment man­agers

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

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

REUTERS

Del­e­gates wait for the open­ing cer­e­mony of the first an­nual meet­ing of Asian In­fra­struc­ture In­vest­ment Bank (AIIB) in Bei­jing.

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