The €424bn Dutch asset manager APG and the €131bn Chinese asset management company E Fund Management have agreed to explore a long-term strategic alliance.
In a joint statement, they said they wanted to use each other’s expertise “by exchanging information about pensions administration, asset management and ICT to increase mutual insight into various pension systems and supporting technologies”.
The partners, who signed a letter of intent, said they also sought to enhance their access to local and global investment markets.
Speaking to IPE, Eduard van Gelderen, CIO at APG, said his organisation was excited about the co-operation, “given that China, as the world’s second-largest economy, is continuously opening its market – both inbound and outbound”.
Although he stressed that the co-operation would focus initially on knowledge-sharing, he made clear APG wanted to be prepared for increased access to the Chinese market.
“Our co-operation with E Fund, as China’s largest asset manager and local partner, will help us to get the answers we need,” he said.
Van Gelderen said APG would apply for a licence to invest in China and that it was already liaising with local supervisors.
He noted that Chinese equity markets could be part of the MSCI World Index within a year and that APG’s investments in the country were likely to increase quickly as a result.
APG has invested more than €5bn in Chinese equity through the Hong Kong-Shanghai Connect, logistics and infrastructure, through local partners and listed companies.
It might also be involved in the establishment of a second-pillar pensions system in China, according to Van Gelderen.
He said China was just beginning to develop a second-pillar system as part of a new five-year development plan, approved last year.
“The Chinese see us as a sounding board and have shown great interest in our experiences with the Dutch pensions system,” he said.
“They want to know much more about asset-liability management and long-term investments.”
Van Gelderen said both players believed there were “many initiatives” they could take together.
“Because E Fund has a strategic partnership with technology-driven internet firms – such as Alibaba and Tencent, for example – it could help to employ technology for investment, communications and robo advice, as well as machine learning,” he said.
APG is Europe’s largest pensions manager and one of the largest fiduciary managers worldwide.
In addition to two offices in the Netherlands, it also has a presence in Hong Kong and New York.
Guangzhou-based E Fund provides a “full spectrum of services” and claims to be the leader in mutual funds, pension funds and segregated-account businesses in China.
It also has offices in Beijing, Shanghai and Hong Kong, as well as other major cities across the country.