TLDR:
- The private investment office PCH, which manages assets for wealthy Italian families, is considering increasing exposure to China amid capital outflows.
- Options include hedge funds, investments in start-ups, and passive China exposure.
Proprietary Capital Holdings (PCH), a Singapore investment firm managing assets for wealthy Italian families, is exploring ways to increase its exposure to China amidst significant capital outflows from the country. The firm’s chief executive, Roxanne Davies, mentioned considering hedge funds, investments in start-ups, and passive China exposure as potential avenues to pursue. However, with the Chinese market currently lacking clear buy signals, PCH is proceeding with caution and selective decision-making in expanding its relatively small China allocation. China has been experiencing notable net outflows since early 2020 due to various challenges, including issues within the property sector, declining consumer confidence, an aging population, and geopolitical risks.
While European and US institutions are withdrawing funds from China, investors from regions like the Middle East and Southeast Asia remain interested but are waiting for stronger policy signals and economic data. Davies emphasized the importance of considering liquidity and risk factors before increasing exposure to Chinese assets, acknowledging the difficulty of determining the optimal timing for such investments. Although PCH had not favored investing in startups via venture capital firms in the past, Davies highlighted a current interest in the Chinese venture industry due to its innovative nature and appealing cycle stage. Similarly, the firm has been monitoring China hedge funds closely, considering certain managers capable of navigating challenging market conditions.
Despite the uncertainty surrounding Chinese markets and regulatory changes, PCH enjoys the autonomy to make investment decisions free from political pressures, focusing on the economic and commercial aspects of the opportunities. While remaining cautious about the Chinese market, the firm is open to learning from families with extensive knowledge of the market and proceeding with caution in its investment approach.
