September's most read: Interview with family office JLin LLC; the implications of a weakening Chinese yuan

Family offices taking first ESG step should consider their biggest passion: JLin LLC MD

Family offices should begin their impact investing journeys with a solid financial infrastructure foundation and thinking about the causes that matter most to them to identify opportunities, according to Robert Kim, managing director of JLin LLC, the family office of professional basketball player Jeremy Lin.

Having met with families over the past few months in Asia, Kim noted that many of them are at a stage where they are ready to get started with impact investing.

“That’s where most of the families are at in Asia; some have already done it for a long time,” he told AsianInvestor. For the former, the question they often ask is: “How do we get started?”

To which Kim’s answer is that it always starts with laying the groundwork from a financial infrastructure perspective, then building the impact pieces on top of that. “Otherwise you run the risk of not being able to achieve your portfolio level returns,” he said.

Market Views: What are the implications of a weakening Chinese yuan?

In September, China’s onshore and offshore currency weakened past the key level of 7 yuan per US dollar. Although it last happened not long ago in mid-2020, this time the declines are accelerating at a much faster pace since August this year.

As the Federal Reserve raised the interest rate again by another 75 basis points on Wednesday (September 21), the Chinese currency further fell to a 27-month low against a surging dollar, with the offshore yuan breaching the 7.1 per US dollar level during trading.

Most believed renminbi’s weakness is largely a function of US dollar strength, in turn, driven by hawkish Fed policy, something that appears unlikely to change any time soon.

Asian family offices expand into alternatives

Asia’s wealthy are favouring private assets, or alternatives, as volatility in the economic outlook shakes up public markets worldwide.

“The last few years have taught us that there is a lot of correlation between markets. War in Eastern Europe can make markets volatile in the US or Hong Kong. This is why many of our clients want to diversify beyond the public markets that they entrusted more holistically – and that has led them to private markets,” Chi Man Kwan, chairman and chief executive officer at Raffles Family Office (RFO), told AsianInvestor.

According to wealth and asset manager Lombard Odier’s 2022 APAC HNWIs Study, Asia Pacific (Apac) high net worth individuals (HNWIs) are repositioning their portfolios, diverting more from traditional asset classes such as equities and bonds. The study showed an increase of 37% over the past two years of investing in alternative and private equity assets.

Market Views: How are investors adjusting to a bond bear market?

Global bonds have slumped into their first bear market in a generation, spurred by the pressure from central bankers determined to quash inflation even at the cost of a recession.

The Bloomberg Global Aggregate Total Return Index of government and investment-grade corporate bonds has fallen more than 20% from its 2021 unhedged peak on an unhedged basis, in the biggest drawdown since its inception in 1990.

Rapid interest-rate hikes deployed by policymakers, in response to soaring inflation, have ended a four-decade bull market in bonds. This has created a difficult environment for investors, with bonds and stocks sinking simultaneously.

On a hedged basis, the bond index fell as much as 12% from its peak. Combined with MSCI’s index of global stocks, which has slumped 19% this year so far, the combination has undermined the traditional approach of investing strategies over the past 40 years or more.

Exclusive: AXA Hong Kong CIO joins New World Development’s FTLife

AXA Hong Kong chief investment officer and Asia head of asset and liability management (ALM) Richard Chan has joined local business conglomerate New World Development’s insurance company FTLife.

Chan commenced in the position as FTLife Insurance Company’s chief investment and ALM officer on Monday (September 26).

This is the first time that FTLife has combined the CIO and ALM responsibilities into one role.

“For me, this is the right model for an insurer to make sure that all decisions are made on a total balance sheet risk and return perspective,” Chan told AsianInvestor.

As the new CIO, Chan replaced Ken Hu, who has led FTLife’s investment team since September 2021. Chan will continue to be based in Hong Kong.

Exclusive: Aegon Asset Management ceases Hong Kong operations, to close Japan office by year-end

Aegon Asset Management has ceased distribution activities in Asia outside of mainland China as it focuses its resources on Europe and the US.

The asset management arm of Aegon Group had wrapped up operations in Hong Kong and plans to wind down its Japan operations by the end of the year, sources familiar with the matter told AsianInvestor. A spokesperson has since clarified that both offices shut down distribution activities on Wednesday (August 31), but the Hong Kong entity will be kept active to support its mainland China business.

On the Securities and Future Commission (SFC) online registry of institutions, Aegon AM was stated to have “ceased business of regulated activities”.

In the Hong Kong office, one employee will be retained while another has relocated to London. A further two will leave the company. In Japan, two employees are no longer with the firm, the spokesperson said without elaborating on whether there were others that had transferred to other locations.