Jean Charles Sambor, BNP Paribas Asset Management
The firm plans to hire five or six people in total, Jean Charles Sambor, the firm’s London-based deputy head for emerging market fixed income, told FSA on a recent visit to Hong Kong. The new roles will include a Singapore-based portfolio manager, Hong Kong-based analysts covering corporate and sovereign debt, and two or three mainland-based analysts looking at the Chinese onshore bond market.
Today, the firm does not have onshore fixed income capabilities in its wholly-owned foreign enterprise (WFOE) in Shanghai despite managing an onshore renminbi bond fund. However, he noted that the firm has onshore capabilities through its China joint venture, HFT Investment Management.
“We want to have onshore bond capabilities,” Sambor said. “I have been covering this market for many years but I’m not based in China, so we want to make sure that there are local people who would know the market.”
The analysts covering the Chinese onshore market will be based in the firm’s WFOE. The mainland entity, BNP Paribas Investment Advisory (Shanghai), was set up in 2014 and is registered as an investment advisory (IA) WFOE.
An IA WFOE is commonly used for institutional client sales or servicing, but unlike an investment management (IM) WFOE, it is not allowed to raise capital from domestic investors.
It is important to have local people on-the-ground, Sambor added, especially since China, the largest bond market in the world, is under-owned by foreign investors.
“Because China will be included in the global indices, we are expecting up to $200bn in inflows in the next couple of quarters,” he said.
Sambor did not provide details of the other new roles in Hong Kong and Singapore, but noted that they would not be focusing on specific markets or regions.
“We want to have a team of specialists that are focused on specific sub-asset classes, not a specialist in one specific region,” he said.
For example, the Singapore-based portfolio manager will not only cover Asia, but will help with the management of the firm’s all other emerging market debt portfolios, he explained.
The Asia build-out plans follow the firm’s hiring of Bryan Carter, London-based head of emerging market fixed income, and Sambor in 2016, in a move to centralise its global emerging market capabilities.
Both Carter and Sambor are lead managers for the firm’s all global emerging market fixed income strategies. Supporting them are portfolio managers who focus on specific sub-asset classes, such as hard currency and local currency sovereign bonds, corporates, foreign exchange and local rates.
At the moment, the whole team is based in London. It managed around $3.2bn in assets as of July last year.
Preferred funds in Asia
Global emerging market debt is gaining interest from Asian investors, Roger Bacon, Citi Private Bank’s head of investments for Asia-Pacific, said previously.
“Asian investors used to be focusing mostly on Asia credit,” said Sambor. “That is still the case, but we are seeing more interest for global emerging markets.”
Asian investors would gain comfort in global emerging markets by investing within the region first, he noted. “Once they understand what it looks like in Asia, they are willing to expand to global emerging markets.”
The Middle East is now Sambor’s favourite region within the asset class, because of very attractive valuations. He is also positive on Asia’s bond markets, given the region’s strong macroeconomic backdrop, in particular the improving sovereign credit ratings.
However, he noted that the team continues to monitor valuations in Asia bonds.
“Asia has been more expensive than all the regions because you have now more Asian flows from both Asia and global investors,” he said. “You don’t have that in Latin America and in the Middle East.”