Dutch pension giant APG has closed its office in Beijing, just four years after it opened. The main reason for the closure was a lack of interest among clients, APG confirmed in a response to questions from IPE.
The opening of its Beijing office in the fall of 2019 marked the start of the €537bn asset manager’s local China credits strategy, which was managed in partnership with Chinese asset manager E-Fund Management.
APG had two analysts working on the strategy from Beijing. In 2019, APG also opened an office in Shanghai, which remains operational. The asset manager has two additional offices in Asia, in Hong Kong and since two years also in Singapore.
APG recently terminated its separate strategy for Chinese corporate bonds because of its “insufficient scale”, according to a spokesperson. “We had expected a growth path with our clients, which has not materialised,” the spokesperson added.
Construction sector scheme Bpf Bouw and APG’s own company pension fund were the strategy’s only clients. APG declined to say how much money both funds had invested in the credit strategy.
ABP, the civil service scheme that’s by far APG’s largest client with €470bn in assets under management, declined to allocate any funds to the strategy because it did not want to invest in Chinese local currency bonds.
“ABP never participated in the APG China fixed income product because we opted for credits in euros and dollars,” a spokesperson for ABP told IPE.
The APG spokesman hinted that the asset manager hoped ABP would eventually have a change of heart, but this did not happen.
APG will continue to invest in Chinese corporate bonds within its emerging market debt portfolio. The strategy in Chinese A-shares, which it has been running with E-Fund Management since 2018, also remains unchanged.