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Supplements » Global Industry 2020

New York roundtable: Saying no to the ESG naysayers

Funds Europe – Was there much disruption early on from the working-at-home environment?

Van Eck – It was all market-based. We didn’t find it operationally difficult. There was more disruption in muni-bonds because that market is less efficient, meaning that there’s a lot of small issues. There’s just not that many people who know what the right price is of a certain Arizona utility bond, so that market tends to be more fragmented.

Funds Europe – How are Sino-US relations affecting institutional investors and asset management companies in the US?

Coldren – We have a presence in China and view it as a huge market opportunity for wealth management. We do investment banking business there, and as part of a French firm, I think we’re a bit less affected by US-China tensions, but there are a lot of opportunities for us in the long run.

Ehret – Around 12 months ago, I was talking about the fact that we’ve seen lots and lots of RFPs and activity on Chinese equities and even Chinese bonds from US investors, but also from European clients. That activity has slowed and there does seem to be caution around buying specifically Chinese product. But if you don’t have insight on the Chinese economy and the Chinese market, you don’t have insight into 99% of all the strategies you manage because it impacts everything.

Van Eck – The political tensions resulted in an acceleration of opening in the financial sector in China. Maybe they weren’t causal, but they were synchronous, and so you’ve seen asset management companies, insurance companies and brokerage firms getting licences in China. We’re trying to get one of those licences. The concerns amongst investors manifest in a way that they like to have China within other products rather than as a single line item. We had thought that that would change a couple of years ago, and it just hasn’t. It doesn’t make sense any more, but I’d see that continuing into 2021 and beyond.

Garland – We have a very big focus on China, particularly in terms of having more and more investment people on the ground in Hong Kong. We see huge demand everywhere except the US; Latin American pension funds have a huge allocation to China, and yet the US is the one part of the world where the focus on China is still very small.

Jones – I’d summarise it as ‘politics don’t necessarily drive long-term financial interest’, because terms change, and people change, and policies change. I was on a panel earlier this week, and we actually focused on how to better inform and educate US institutional investors on how to carve out China as a dedicated mandate. It’s a pretty interesting area of the marketplace. You can’t deny the growth and the opportunity structurally; we just must figure out how to get those allocations to happen.