- Springs Singapore to initially allocate to hedge funds
- Li Chao, Richard Williams become co-CIO of Singapore unit
Springs Capital, a Chinese fund manager with about $5 billion of assets, has hired a four-member team to find international investments for companies and wealthy individuals in China.
The team from Hermes Investment Management will be part of a new unit in Singapore, said a person with knowledge of the matter, who asked not to be identified as it awaits a local regulatory license. It will look for investments opportunities abroad for Chinese companies and wealthy individuals seeking to preserve their capital and diversify risks, said the person.
Former Hermes managers Li Chao and Richard Williams have become co-chief investment officers of the Singapore unit, and Mike Curry its chief executive officer, according to the person and their LinkedIn profiles. They will initially run funds that allocate capital to other managers, starting with hedge funds, the person added.
Jenny Tian, a managing partner based in Springs Capital’s Hong Kong office, declined to comment on the plans.
China is easing restrictions on cross-border capital flows as economic growth is slowing in the world’s second-largest economy. Its domestic stock market, dominated by individual investors, has tumbled more than 30 percent from a mid-June peak after more than doubling in the previous 12 months, with limited tools to help cushion investors from losses.
Offshore hedge funds, including those based in Hong Kong, have struggled to tap China’s more than 130 trillion yuan ($20.5 trillion) of corporate and household savings.
A myriad of often state-backed Chinese mutual funds have expanded to Hong Kong in recent years, taking advantage of both international demand for fund products focused on their home country and domestic clients’ rising international investment needs.
Unlike a mutual fund, Springs Capital restricts its fundraising to wealthy individuals and corporates. The $5 billion that Springs Capital manages includes these lightly regulated funds run out of its Beijing and Shenzhen offices, and pools of capital from international investors overseen by its Hong Kong-based staff, said the person. Its international investors include the Canada Pension Plan Investment Board, according to information posted on the website of the largest Canadian pension fund.
About 1,300 Chinese private-placement securities funds have been liquidated amid the recent rout that wiped as much as $5 trillion off the country’s stock market value, as excessive borrowing was unwound and concerns about an economic downturn mounted.
Li and Williams were part of the Singapore-based team that left Hermes, owned by BT Pension Scheme, at the end of August, said the person. They ran a Greater China fund of hedge funds and also helped create a product that gave international investors access to China’s domestic stock market through ideas generated by local managers.