US investment firm Barings LLC and Singapore-based Eastspring Investment have cut staffing levels in their China hedge fund and private fund teams, according to Bloomberg, citing market sources.
At least seven people at Eastspring or one-third of its onshore hedge fund have left in recent months, and the company may also close some local hedge funds to focus on other markets, the news agency says in a report on December 5. Eastspring is the investment arm of UK insurer Prudential Plc.
Meanwhile Barings, a unit of Massachusetts Mutual Life Insurance Co, has downsized its China private fund team to put more emphasis on the Qualified Domestic Limited Partners (QDLP) business, a Chinese scheme that allows international asset managers to raise funds from qualified local investors for investing in mainstream and alternative assets overseas. The report did say how many people have left the Barings team.
A Barings spokesperson says she will not comment on market speculation.
“Our onshore team resourcing has remained relatively stable as of today,” she tells Asia Asset Management (AAM). “Barings’ commitment to China, including both private fund management and QDLP business, remains unchanged. We have been identifying various investment strategies to satisfy the needs of both onshore and offshore clients.”
Spokespersons for Eastspring did not immediately respond to questions from AAM.
China’s economy has slowed amid a debt crisis in the property sector. The benchmark CSI 300 has lost 12.2% thus far this year as investors reduce their exposure to China.
There were successive monthly outflows from China’s stock market between August and November, Goldman Sachs notes in a report on December 4.
“Global managers will make tactical adjustment to protect their core business and bottom lines during market downturns, but on a more strategic front, the long-term growth story and potential of China is undeniable,” Yoon Ng, principal in Asia Pacific asset management advisory services at financial technology firm Broadridge, tells AAM.