Invesco raises $5.4 billion of its investment in China in the first half; Economic risk alert

Invesco raises .4 billion of its investment in China in the first half;  Economic risk alert

(Corrects the tenth paragraph to show the company’s plans to increase the holding in the joint venture, not that it does not have such plans)

by Selena Lee

HONG KONG (Reuters) – The US-based Chinese head of China asset manager Invesco said Invesco’s Chinese joint venture withstood the first half of volatility and attracted $5.4 billion from domestic investors, but the country’s policy of not spreading the novel coronavirus poses risks to the economy.

China’s economy has been hit hard by the COVID-19 lockdowns and the turmoil in the real estate sector, which has reduced investor holdings and driven down asset prices.

โ€œMarket sentiment is tough, especially for COVID and everything,โ€ said Andrew Lu, chief executive of Invesco’s Hong Kong-based Asia Pacific unit, which manages $1.4 trillion in assets globally.

“I think people are resilient…but I would like to believe that if it continues (the no-coronavirus policy) it will affect people and the economy as well,” Lu told Reuters, adding that the policy could “evolve” from its current position next year.

Despite the near-term challenges, Invesco plans to expand its team in China to capture inflows when the market returns, he said, adding that China, the company’s global growth engine, remains a “very attractive market.”

Invesco’s 49% owned subsidiary, Invesco Great Wall Fund Management, managed to raise $5.4 billion from Chinese investors in the first six months of this year, mostly in fixed income funds in the face of a stagnant fundraising market.

The joint venture, which has 354 billion yuan ($50.51 billion) in assets under management excluding cash, added more than 20 employees this year across investment and operating functions. It achieved a profit of 756 million yuan in the first half.

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Invesco Great Wall launched a fund advisory business in March and partnered with seven fund distributors, including Ant Fund and Tiantian Fund, two of China’s largest non-bank fund sales agencies.

Since China eased restrictions on foreign ownership, Invesco’s foreign counterparts, including JPMorgan (NYSE:) and Manulife, have either been quick to take control of their joint fund ventures or have moved to launch new operations.

The US manager plans to increase his stake in the joint venture but has no intention of buying its partner China Great Wall Securities which would mean full control, according to Lu.

In Asia, Invesco has seen stronger demand from regional clients for its own investment products such as private real estate funds, and increased interest in ETFs listed outside of Asia from institutions.

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