PETER LUNDGREEN Founder & CEO

LUNDGREEN’S CAPITAL

Peter Lundgreen has been actively involved in the global finance and banking industry for the past 30 years, with a special focus of expertise in financial markets and complex product risks in major markets, particularly Europe and China.

Peter founded Lundgreen’s Capital in 2009, a financial investment advisory company based in Copenhagen, Denmark. Since then, Peter was able to turn Lundgreen’s into Denmark’s biggest independent investment and financial advisor to Danish municipalities and local governments.

His move now is to penetrate Asia, the world’s engine of growth. With its huge presence in China, Peter hopes to make headway in the region with an active presence in the Philippines.

The company From its strong presence in Denmark, Peter has already expanded the business further to include fixed advisory assignments about strategic management of assets and liabilities worth more than $1 billion.

Lundgreen’s Capital is also present in Asia, which emphasizes Peter’s strong international network. The truly international network combined with the deep insight and knowledge about the financial markets makes Peter a highly-respected advisor.

The company is regulated by the Danish financial authority “Finanstilsynet” (similar to the FSA in the UK) and has a license to offer professional investment advice and risk management consulting within the European Union. The client segments are corporations, municipalities, funds, and trusts.

Lundgreen’s Capital also publishes a widely read 28-page quarterly magazine about the global financial markets. The firm additionally issues a weekly newsletter and occasional compact comments on China.

Lundgreen’s Capital is built on the following insights: markets, clients, trust and quality of performance in whatever they do. But they choose their partners with care, especially so that they are in the financial industry.

Asian expansion With the world economy being driven by emerging Asian countries, professional economic and investment advisors have also spread its wings into this region providing professional investment advice and guidance either to businesses and multinational firms seeking to explore expansion opportunities in the region and even to provide inputs to governments.

As an asset manager, Lundgreen is also assessing the domestic market for possible investments opportunities.

“Basically, we are advising professionally clients on financial and investment risks and of course we advise location investments and stocks,” says Peter.

Lundgreen’s Capital also runs its own China operation to gain headway in the leading Asian economy. Lundgreen’s Capital is well-known for deep and quality insights on the Chinese financial market and has launched a mutual China fund listed in Luxemburg – Lundgreen’s China Fund.

The China Fund was launched last 1st February 2016. The fund comprises of investors from around the world such as California and Dubai.

Its expansion in Asia was predicated by the accelerated growth in the region in the past couple of years.

The China Fund sets itself apart from other funds mainly due to the clear choice of companies and sectors that Lundgreen’s Capital forecast to benefit from the ongoing economic growth in China and in selected Chinese companies.

China is one of the focuses of Lundgreen’s Capital while the company has its own economic research unit in Hong Kong.

Lundgreen’s Capital is therefore also in the position to offer advice and knowledge about the Chinese economy, financial markets, politics and the likes.

Based on his solid 30-year experience on international financial markets, Peter ensures that the firm achieves new milestones every quarter as well as substantial business growth each year.

It further aims to grow the AUM (asset under management) in Lundgreen’s China Fund on its own sales efforts particularly via establishing a broader network for sales and to continue the incipient development of establishing partnerships and strategically expand social media profiles and activity.

PH infrastructure In the case of the Philippines, Peter believes that the tax reform package is the most critical issue now because the government’s huge infrastructure projects rely on the additional taxes that will be generated from this revenue generating measure – Comprehensive Tax Reform Program.

But Peter has a word of caution. He warned the government of putting all its eggs in one basket: Infrastructure.

According to him, the Philippine government should not put all of its hopes to lift the GDP through its huge R8.2-trillion infrastructure program because unless these projects are going to generate income, these are all huge budgetary expense. The government expects infrastructure spending to contribute as much as 7 percent of GDP.

“Infrastructure is important for any emerging economy to ensure more growth, but it has now turned out to be a corner stone in the current government’s economic policy and simply a source of growth,” says Peter.

The investment adviser called the huge infrastructure projects “risks” noting that all of a sudden the government leans on too many infrastructure projects as sort of “GDP growth machine.”

Peter said that all projects, even public infrastructure projects, need to have positive yields otherwise it is unwise to start them off.

“Many forget it that if a project does not return positive yields, then the investment even if it is for everybody will have negative economic benefit,” says the investment guru.

This makes him critical of local politicians who have been pushing for huge government infrastructure projects but did not discuss the cost benefit analysis of these ventures.

“This is where many people, many politicians forget by just putting money into public projects,” he says.

He urged the Duterte administration not to commit the same mistake of Spain and Italy, two of the most indebted EU countries. These two countries have more infrastructure projects with negative return on these investments. Each project should be financially viable and yield positive return.

“They should not repeat what happened in Italy that only created financial crisis,” says Peter.

Building a government hospital is a good venture despite it being a basic cost because it will heal people and people become productive, but he questioned the wisdom of the proposed ambitious 653-kilometer north-south railway costing $3 billion.

He said this is the kind of discussion that has been missing in all of the infrastructure push, including China’s massive infrastructure build-up via its “One Belt, One Road” initiative.

“Building fixed asset investments is good but this need to be treated with care because like sugar for politician, it is sweet but after that you need to bring down the debt because that will rise,” says Peter.

Internet Since it is critical that these infrastructure projects need to spur growth and generate income, the investment adviser said government should prioritize the financially viable projects.

One project that government should prioritize is building a good internet infrastructure.

“With better internet, people can grow their income even in the rural areas. Freelancers can thrive in the rural areas because the Philippines is very competitive with its very young and English-speaking population compared to its peers in Asean,” says Peter.

“Filipinos can access international market because they speak good English but we need internet. Government should scale up investment in internet connection because that is the most vibrant investment the government could do so the people can generate more income.”

“Do the internet first,” adds Peter noting that internet should have higher priority in the infrastructure heirarchy. “My biggest concern in the infrastructure is it is a very old-fashioned thinking,” he adds.

With the online platform, he said, lots of jobs can be done at home from web design, translations and all sorts of services can be done from a laptop, especially that this market is growing enormously in the outsourcing space.

Local outlook

According to Peter, the Philippines has grown considerably in the past one a half years.

There was, however, a change in the political situation that has caused a slight change in the risk factor of the country. He said the political environment has changed a bit making EU and American investors a little concerned.

But Peter said this has always been the case when a new administration comes on board.

Fundamentally though, Peter said the Philippine economy is still very strong and stronger than any other economies in ASEAN.

“I am still positive on the Philippine economy’s outlook,” says Peter.

“Although not as much as 12 months ago, we still recommend the Philippines to investors. This is despite security issues in Marawi and the declaration of Martial Law.”

He expressed confidence that investors will continue to stay and expand only in areas with no security risks.

Meantime, he also urged for a thorough study of the Comprehensive Tax Reform Program.

The most important thing though and very interesting part, he said, is that the government is actually dealing with the widening gap between the rich and the poor, which has been the challenge even in developed economies.

“Even with large economies, they have the same problems with rising income and difficulty to deal with that. The interesting thing is that the government is trying to deal with income gap and that the government is doing something,” he adds.

If the tax reform package is balanced in terms of government budget and tax reduction, then it is positive. But he also warned against too many tax exemptions stressing that tax cuts need to be financed by other income sources.

“That is important but in itself the proposal is very interesting and if done as proposed then I believe this will lead to higher DGP growth,” he adds.

The President’s non-diplomatic approach could also be a factor to consider as he cited the EU reaction to the President’s brand of diplomacy. There is however, the view that EU is not also in line with the times. EU could end up under estimating the power of Asian economies. EU itself is having their own problems with Brexit and other security issues.

“Countries that arise with economic power are here in Asia, but EU is not understanding Asia,” observes Peter.

“The power is in Asia, and China, of course, is extremely powerful in Asia. There are only two power concentration now US and Asia.”

He said Asia has become big because of the huge opportunities. There are more talents in this region who are very highly flexible and dynamic in thinking. Asians also approach the world by working hard to achieve their goals and that is a winning strategy.

That is why things are growing and lots of opportunities are created for EU and US investors in Asia.

The Philippines although not as attractive as 12 months ago, Peter says it is still the growth engine for the region. He added that the slight change in the attractiveness of the Philippines is not solely due to the President’s nondiplomatic approach, but is coming from a mix of different factors, including external headwind.

Open for business

Lundgreen has no big presence yet in the Philippines, although it is open for business in the country since 2015.

“What brought me here is the huge talent pool and well-educated people, who are profound in the English language,” he adds.

Peter did not cite the issue of corruption in the Philippines, but stressed that he comes from a country of 5.5 million and with zero corruption.

“If a police officer receives a mobile phone as a bribe, that should be in the front page of all papers already because that is a big offense and that person should be kicked out immediately. That is the level of corruption in Denmark,” says Peter.

Peter slammed corruption as truly bad for the economy but is very difficult to get rid off. In India, he said, fighting corruption is done in different levels and there are lots of initiatives that start from the higher ranks in the government echelons.

He is still weighing if they need to expand its presence in the country. I fever, Lundgreen’s will be focusing more on the digital and social media marketing. Peter runs a very lean organization, mostly working with economists.

But Peter’s visit to the country is becoming frequent stressing his company is always open for business. If this is an indication, then Lundgreen’s Capital is in for an expanded operation.

Despite being new to this market, Peter has been encouraged by an employer’s access to many talented and highly skilled workforce. He said an investor should be attractive not by cheap labor but of good talent.

“That is why I am here because of pretty good talent and the whole economic environment,” says Peter, even as he cited the huge traffic snarls in Manila.

Proud of their Vikings’ heritage, Peter spoke of their brutal heritage noting that despite the horrors of wars, Danes still regard the Vikings as conquerors and treated them as heroes after a thousand years. But here in Manila, the friendliness of Filipino seemed to disarm Peter.

“People are friendly from the heart and that means a lot,” he adds as he shared his love for local delicacies “lechon” and “sisig”. He just got himself his first Filipino cookbook.

Lundgreen’s is open for business, so is the Philippines.