While China’s equity market continues to scare the bejesus out of most investors, Kerr Neilson, the billionaire chieftain of Australia-based and Soros-backed Platinum Asset Management, is looking to launch a new fund focusing on the embattled region.
In an opening letter seen by the Australian Financial Review, Neilson told would-be investors that:
“While some investors may be concerned about the slowing pace of China’s economic growth, the manager is optimistic about the ability of the Chinese government to transform the country’s economy from one that is concentrated on secondary industries such as manufacturing and investment to one that is more focused on tertiary industries such as services and consumption.”
Aside from China, the fund will also be investing in India, Vietnam, and Hong Kong among others, though China and India supposedly offer the most compelling opportunities for him at the moment.
His call comes in stark contrast to those of several hedge fund managers, particularly with Bridgewater’s Ray Dalio, who recently wrote:
“Because the forces on debt are coming from debt restructurings, economic restructurings, and real estate and stock market bubbles bursting all at the same time, we are now seeing mutually reinforcing negative forces on growth… …I believe that China’s policy makers have both considerable resources and skills and the willingness to manage it well, though the new development makes me less confident it can be managed without a painful economic slowdown along the way.”
Either way, Neilson plans to raise over $400 million for Platinum’s new Asia fund. How it performs, we’ll find out soon enough.
Photo: Michael McDonough