BNP Paribas Asset Management is relocating its Asia fixed income team to Hong Kong as it increases its focus on China, AsianInvestor can reveal. The move will see the head of the division depart, and the firm is in discussion with the other four team members about the switch.
The French fund house also plans to hire another deputy head of global emerging markets fixed income, to be based in Hong Kong and report to Bryan Carter, London-based head of emerging-market fixed income, who oversees a global portfolio of $3 billion.
The decision to shift the five-member team from Singapore is expected to help increase penetration of mainland China, Carter told AsianInvestor. “It made more sense to have a regional hub for fixed income in Hong Kong, which is a gateway to China.”
Carter said the relocation represented a initial step to establishing a broader footprint in China. This will lead to set-up of an onshore team there, he added, subject to the relevant regulatory approvals. He did not give a likely time frame for the changes.
The firm’s decision comes as Beijing has steadily opened up its $9 trillion onshore debt market to foreign capital in recent years. It has been easing the rules around cross-border investment in the past year or so and last month launched the Bond Connect trading link with Hong Kong. Inflows are set to rocket once renminbi bonds are included in the main global fixed income benchmarks, as is expected within the next year or two.
However, Adeline Ng, head of Asia fixed income at BNP Paribas AM since April 2008, has decided not to move to Hong Kong and will leave by the end of the year. She specialises in managing global and Asia fixed income portfolios and has been with the firm since December 2001.
The other four members of the team are still deciding whether to relocate to Hong Kong, said Carter. BNP Paribas AM declined to give their names, but they comprised a portfolio manager, two analysts and an investment specialist.
Carter said the fund house would seek a replacement for Ng, but not as regional head of the division. This is in line with the new structure of the EM debt team globally, he noted.
Since Carter became EM debt chief in February last year, the division has been reorganised by asset class rather than region. Portfolio management teams have been built around the specialisations of hard- and local- currency rates, sovereign credit and economics, corporate credit and foreign exchange.
Meanwhile, BNP Paribas AM is hunting for another deputy head of global EM fixed income to be based in Hong Kong to work alongside JC Sambor, currently the sole deputy EM debt chief, based in London.
Carter said: “We hope to have someone with Asian expertise, but also capable of having a global view on emerging markets and looking at Asia within that context.”
To be sure, BNP Paribas AM will be entering a fiercely competitive market in fixed income expertise. Fund houses, from global players such as UBS to local players like Singapore’s Fullerton, are looking to build their mainland bond capabilities.