Greenwich survey too pessimistic, says Z-Ben Advisors

Peter Alexander, principal at Z-Ben Advisors, says a recent Greenwich Associates report about the disappointing degree of outsourcing investments to third-party fund managers among Asian institutional investors, downplays the opportunity for business in China.

"Our outlook for growth prospects from Chinese institutions, including those beyond CIC, Safe and SSF, is significant," he says. Already, insurance companies, corporations and investment trusts account for over $1.2 trillion of assets, beyond the vast holdings of the 'big three' of China Investment Corporation, State Administration of Foreign Exchange and the National Council for Social Security Fund.

"While most of these assets, as Greenwich rightly points out, may not be available to foreign parties today, our expectation is for this to change over the next five years, and to accelerate thereafter."

Alexander says foreign fund managers need to spend this time better managing their representative offices, which he says are not being put to work very well at identifying future prospects and developing relationships with those, in anticipation of future business.

Abhi Shroff, Singapore-based vice-president at Greenwich, who presented the findings of this research to AsianInvestor conferences last week in Hong Kong and Seoul, says he actually agrees with Z-Ben. Not because Greenwich misread the opportunity, but because it doesn't make all of its findings public.

Shroff says the report notes that fund managers see China as the greatest business opportunity in Asia ex-Japan.

"It's good to see people react to our report," he tells AsianInvestor. "Maybe you can get an online debate going about the industry." Want to comment? E-mail us here.

Z-Ben intends to release its own findings about China's institutional market towards the end of the year.