High Conviction: 2019 Investment Ideas & Themes Hong Kong

27 Nov 2018
1pm – 6pm onwards
JW Marriott Hotel, Hong Kong

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1pm – 1:30pm Registration
1:30pm – 2:15pm

Leaders Conversation Panel 1 | A sobering 2018: Positioning Asian client portfolios for 2019

Global investors entered 2018 with high hopes for a moderated repeat of 2017 only to be disappointed by a false start. The US-China trade tensions elevated from what was viewed early on as an inconsequential spat to a conflict with potentially substantial consequences to the economy and earnings. In Asia, investor euphoria from 2017 was short-lived and greater allocations to cash and alternatives are indicative of dented sentiment.

How will the trade war play out in 2019 and what will be its impact on global markets? How will inflation, rates and the US dollar move? What are private banks advising clients to do next year, both in terms of long-term positioning, short-term trading and income generation? How are clients expected to respond given the current environment?

Richard Otsuki, Deputy Editor & Head of Investment Coverage, Asian Private Banker

Conversation catalysts:
Anthony Chan, Chief Investment Strategist Asia, Union Bancaire Privée
Fan Cheuk Wan, Managing Director, Head of Investment Strategy and Advisory, Asia, HSBC Private Banking
Grace Tam, Chief Investment Advisor, CIO Investment Strategy, BNP Paribas Wealth Management
Jim Veneau, Head of Fixed Income Asia, AXA Investment Managers
John Woods, Managing Director, Chief Investment Officer Asia Pacific, Investment Strategy, Credit Suisse

2:15pm – 2:45pm Workshop Rotation
2:45pm – 3:15pm Workshop Rotation
3:15pm – 3:45pm Workshop Rotation
3:45pm – 4:15pm Workshop Rotation
4:15pm – 5:00pm

Leaders Conversation Panel 2 | Long-only only not enough: Seeking low beta, uncorrelated returns

Traditional long-only assets faced market headwinds all year long as private banks sought to steer clients away from short-termism into more long-term holdings to exploit secular trends, illiquidity premiums and general diversification benefits. In an environment less conducive for broad, standard long-only exposure, fund houses may be challenged to provide new exposures, themes and strategies better fit for presently moderated sentiment. Meanwhile, internal asset management arms, alternatives providers and investment banks are further encroaching on the traditional third party fund house territory to fill demand outside of standard asset allocation building blocks.

What were some of the standout fundraisings within alternatives in Asia this year? What common private market themes or strategies resonated with clients? Have liquid alternatives proven themselves as viable options for hedge fund exposure? Is there still inflow potential for Asian HNWIs amongst liquid, long-only strategies? Will fund selectors continue actively consolidating client fund assets with unconstrained managers given current market conditions?

Charlene Cong, Senior Reporter, Asian Private Banker

Conversation catalysts:
Edward S. Moon, Managing Director and Regional Head of Alternatives, Asia, HSBC Private Banking
Gunther Jost, Head of Hedge Funds APAC, Investment Products and Services, UBS Global Wealth Management
Lily Chan, Managing Director, Alternative Investments – Investment Management, Goldman Sachs (Asia) L.L.C.
Simon Godfrey, Head of Product Management, EFG Bank

5:00pm-6:00pm Champagne Reception & Networking
6:00pm onwards Dinner

Workshop Topic Details

Asia’s Very High Yields, Signs of Looming Distress or Genuine Alpha Opportunity
The rhetorical echoes of the trade war have dampened investors’ moods and left the Asian credit universe full of very high yielding bonds, levels not seen in many years. There are currently a large number of bonds in JP Morgan’s Asian Credit Index (JACI) with a yield to worst above 10%, (and averaging more than 16% on a simple basis). Some of these bonds have reached such wide levels for valid, fundamentally driven reasons while some of them are mispriced due to misplaced investor sentiment, and represent alpha opportunities for a large range of strategies. Realizing this alpha is not without its challenges as proper due diligence remains essential as does having an investment horizon and risk budget that can tolerate a fair amount of volatility. For now and until there is a change in trajectory in the trade war trends, this will be the formula for performance in Asian fixed income portfolios.

Workshop host:
Jim Veneau, Head of Fixed Income Asia, AXA Investment Managers

Positive Change – Contributing to a More Sustainable Future through Listed Equities
Living standards have improved significantly over recent centuries, but the benefits haven’t been felt by all. Growing inequalities, persistent poverty and climate change are some of the most pressing challenges we need to solve in the decades to come. Businesses and investors have the ability to help steer our world onto a more sustainable path, and those that do should prosper in the long-run. Will Sutcliffe will discuss how patient investors can help contribute towards a more sustainable world while making attractive investment returns.

Workshop host:
Will Sutcliff, Investment Manager and Partner, Baillie Gifford

Is the Best Defense, Still a Good Offense?
In face of the uncertainties like US-China trade tensions, monetary tightening and geopolitical risks, investors are facing a complicated investment path navigating the market. Whilst there are still attractive opportunities, future returns are likely to be more muted and risks will remain high. Selectivity and active management of downside risk is going to be key in this environment. Philip Saunders, Co-Head of Multi-Asset Growth of Investec Asset Management, will share his outlook for 2019 and discuss the key aspects of a truly diversified approach to multi-asset investing.

Workshop host:
Philip Saunders, Co-Head of Multi-Asset Growth, Investec Asset Management

Private Debt Investment
Assets in private debt funds have tripled in 10 years to US$667 billion (as of December 2017). New commitments are growing: US$100 billion in new capital are raised in each of the last 3 years. In 2010, private debt capital was utilized as a financing option in just 40% of buyout transactions globally, but by 2017 this increased to 77% of deals.1 The expansion of this asset class is simply too big and important to ignore. The Maritime and aviation sectors provide attractive risk adjusted yields and investment opportunities due to funding gap coming from the continued retreat by traditional banks from ship lending and long-lived, portable yet limited supply of the aviation assets respectively. Private debt is an attractive asset class, but only through a highly selective private debt allocation approach and specialized industry expertise, will you be able to achieve the best outcomes.

Workshop host:
Omar Kodmani, Global Head of International Business Development, EnTrustPermal (a subsidiary of Legg Mason)

Uncorrelated Alpha – Machine Learning-Based Systematic Beta-Neutral Long/Short Equities Approach
While allocating to alternative sources of alpha, one must take into account not just correlations, but also various dimensions of risk – for the strategy to provide portfolio benefits, its liquidity profile must be facilitative, its holdings must have seldom overlaps, and its security selection criteria must factor in sustainability elements, especially in today’s context. With the rise in the availability of data and technological advances in processing power, a disciplined and selective systematic approach that leverages the strength of machine learning is certainly more equipped to achieve the above objectives. During this interactive session, RAM will share their insights into machine learning application and explain how its beta-neutral systematic long/short equities strategies seek to deliver consistent alpha with beta-neutrality, while managing portfolio diversification, liquidity and ESG risks. They will also share their latest observations in sector and geographical allocations, as well as style behaviours.

Workshop host:
Thomas de Saint-Seine, CEO, Partner & Senior Fund Manager, RAM Active Investments





For further information, please contact: alice.c@asianprivatebanker.com
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