A changing of the guard – who are the new buyers of Asian G3 bonds?

Asset Benchmark Research announces the Top Investment Houses in Asian G3 bonds for 2017

IT comes as no surprise that the profile of Asian G3 bond buyers has changed to reflect the growing China bid, considering the explosive rate at which onshore borrowers have issued dollar debt this year. It’s in this context that Asset Benchmark Research (ABR) releases the top investment houses in Asian G3 bonds for 2017.

Since ABR launched the ranking in 2013, the house categories have expanded to include asset managers, hedge funds, private banks, banks, insurance companies and sovereign wealth funds. The houses are ranked based on the number of votes they receive for their investors from the top-rated analysts, economists, strategists, salespeople and traders.

China Life Franklin Asset Management (CLFAMC) is the largest asset management company in Hong Kong that is majority-owned by a Chinese company (as of July 2017). It speaks volumes that this year it has topped the asset manager category beating international heavyweight BlackRock. As of mid-June, CLFAMC’s assets under management (AUM) hit a record high of HK$200 billion (US$25.6 billion), of which 80% is from bond investment.

Other Chinese institutions are also giving the global fund houses a run for their money. China Merchants Securities Investment Management (CMS IM) and Orient Finance Holdings take the third and fourth spots in 2017. CMS IM manages the investment book of China Merchants Securities while Orient Finance Holdings is the investment arm of Shanghai-headquartered Orient Securities. As of the end of 2016, Orient’s Hong Kong-based offshore arm had HK$10.6 billion in total assets.

According to Dealogic, the year-to-date volume of Asian G3 high-yield issuance excluding Japan was roughly five times the 2016 level as of mid-August. The high-yield focus translates to shops that have topped the hedge fund category this year.

Value Partners leads the list this year and is well known for their greater China high-yield income fund. While the firm has traditionally had a North Asia focus, this year they launched their first global emerging market fund. HPS Investment Partners and Nexus Investment Advisors are among the new entrants to this list. HPS focuses on non-investment grade credit and as of March had approximately US$39 billion of AUM globally. Nexus Investment Advisors is a Hong Kong-based fund that is a spin-off of Tokyo-listed SPARX Group’s special situations team.

Morgan Stanley Private Wealth Management leads on the private banking side and beats out CA Indosuez, the private banking arm of Credit Agricole. As of mid-June, the latter agreed to acquire the private banking operations of Credit Industriel et Commercial in Singapore and Hong Kong, which will conclude with them overseeing an AUM of US$14 billion in Asia.

China’s first joint-stock commercial bank, China Merchants Bank, retains its lead among the onshore banks and China Zheshang Bank moves up one spot to rank second. Headquartered in Hangzhou, China Zheshang Bank launched a US$1.75 billion IPO in Hong Kong in March of last year.

For the latest rankings of the Top Investment Houses in Asian G3 bonds for 2017, please click here.

For the latest rankings of the most Astute Investors in Asian G3 bonds for 2017, please click here.

To find out more about Asset Benchmark Research and our Asian G3 Bond Benchmark Review, please click here.

The winners of top investment houses in Asian G3 Bonds for 2017 will be honoured at a gala dinner. For further details, please click here.