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APG enters China A-shares market through ESG fund

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Dutch asset manager APG has committed €250m to a China A-shares fund with a responsible investment focus.

APG has teamed up with Chinese asset manager E Fund Management (EFM) for the launch, which the firms said was the world’s first A-shares fund with such a focus.

“The fund will provide access to the investment market of mainland China and will focus on equity of a limited number of listed companies,” said Harmen Geers, spokesman for APG.

In addition to environmental, social and governance (ESG) criteria, companies in the portfolio would also be selected for their risk-return profile, he said.

According to Geers, APG planned to make an initial commitment of €250m from its clients’ pooled assets for emerging market equities. He added that APG’s intention was to increase the investment over time.

At the moment, APG doesn’t have any exposure to Chinese A-shares in its €451bn portfolio.

Geers added that the fund would be co-managed by APG through a joint management team of employees from the Dutch manager and EFM.

In a joint statement, Ronald Wuijster, acting chief executive of APG Asset Management, said APG was pleased “to embrace its role and duty as responsible long-term investor for the benefit of its clients”.

“Our responsible investment approach, combined with local intelligence, will create unique investment opportunities in China,” he added.

Wuijster also indicated that APG would like to set a trend and share its expertise with other institutional investors.

Sau Kwan, president of EFM, said co-operation with APG would bring “world-class” ESG investment experience to her company’s market place.

“E Fund Management is already a member of the UN’s Principles for Responsible Investment and we have been equipping ourselves for ESG investments for quite some time,” she said.

“We are excited to translate our efforts into a tangible investment strategy, which we are confident [will] produce positive investment returns, and to expand the positive impact to a more sustainable community beyond financial performance.”

APG is the largest manager of pension assets in Europe and one of the largest fiduciary managers worldwide. It has offices in the Netherlands in Amsterdam and Heerlen as well as in Hong Kong and New York.

With RMB1.1trn (€139bn) of assets, E Fund Management is one of the three largest fund managers in China. Headquartered in Guangzhou, it has offices in Beijing, Shanghai, Hong Kong, Nanjing, Chengdu, Dalian and New York.

A-shares are domestic listed shares of Chinese companies. More than 200 are to be added to MSCI’s indices next year.

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