Edinburgh-based Scottish Widows Investment Partnership — sadly known as Swip — is to launch a commercial property fund in China over the next two years.

The company itself is renowned in Britain for the way it ran an advertising campaign. The advertisements showed the Scottish Widow, plainly having been widowed at an untimely young age, looking positively scrumptious in her widow’s weeds. The latest model to don the cloak is Hayley Hunt, from Virginia Water in Surrey.

There is no suggestion that this epic campaign will be used in China, more’s the pity. Instead fund management group Swip, which already has about $14 billion of its $194 billion assets invested in UK and overseas property will be investing in China.

Leading the drive will be Malcolm Naish who joined Swip as head of property last year from DTZ Investment Management.

Swip’s plans are at an early stage, with the company talking to potential partners, including developers and investors who have a knowledge of the local market in China.

Malcolm Naish said: ‘I suspect we’ll invest in more developed markets on the Eastern seaboard of China, such as Shanghai, but that depends on which partners we find.

‘When you go into a market such as China you need access to the right people who understand how the system works. . . .

‘We’re currently assessing what cycle in the market China is at.

‘We’re more likely to launch institutional funds in the first instance, but we’re open minded about retail funds.’

He added: ‘Some property fund investors took fright last year but those who have ridden through this storm should see sensible returns over the longer term.

‘The current downturn looks different from those in the mid 1970s and 1989-90. The economy is more stable, for example.’

Swip is drawn to China include its growing and urbanizing population and high GDP, 9% per annum between 1995 and 2005, compared with 2.7% in the UK.

Not many UK fund managers have commercial property funds investing in China.
Source: The Scotsman

The million-dollar bonus has arrived in China’s financial services industry.

Fierce competition has forced companies to start offering Wall Street-type compensation, especially in the fund management industry.

Executives report a big increase in CVs received from US-based professionals with a China connection. Peter Alexander, head of fund management consultancy Z-Ben Advisors said, ‘There were several bonuses over a million dollars last year. Retaining assets is no longer the top priority, it is getting and retaining good people.’

The fund management industry has seen an explosion in assets under management from $40 billion in 2005 to around $450 billion by the end of 2007.

A senior executive at a Shanghai-based fund management company who asked not to be named said, ‘I personally know of at least half a dozen managers who made more than a million dollars.’

China has 60 approved asset management companies, almost half of which are joint ventures or have foreign shareholders.

Industry executives complain about the small number of people qualified to manage funds at local fund management companies — one executive said about 300 people had all the required regulatory qualifications.

Perhaps we will see a Chinese equivalent of Tom Wolfe’s The Bonfire of the Vanities. The bonuses are already at the level reached in that amazing novel.
Source: Financial Times