Just days after Wilfred Wong took the helm as executive chairman of the China operations at Singapore-based fund manager Pacific Star, he was quoted by the Chinese newspaper Shanghai Daily declaring that the group planned to grow its assets under management from $4 billion currently, to $10 billion in 2011.
I am now looking at money from China investing outside. We are hearing that the Chinese government as well as China's private enterprises have accumulated enough assets and are looking outside of the country to invest.
The firm, which took more than eight years to reach its current size, can further grow its asset base by 150 percent within three years, by Wong's reckoning. When approached by PERE to explain how he thought the group could meet such an ambitious target in times when global investor sentiment is so low, Wong replied: “I'm very bold in making this projection but it is not groundless.”
The 56-year-old cited an increasing lack of competition on both the fundraising and investing fronts. He said the firm's established regional presence would also aid his projection: “The number of big players has fallen by the wayside. Many of them are in positions to sell, not to buy. We also have a platform with a very strong regional presence. Decisions are not made in Singapore alone, they are made jointly with the country where we want to invest.”
In addition to Singapore, Pacific Star, led by founder and group president Jeff Tay, has offices across Asia. It also operates outside of the continent from Munich, New York and Doha.
Reporting directly to Tay, Wong will be charged with originating deals but also with delivering Pacific Star's funds platform to Chinese investors. Historically, the firm has raised most of its equity outside of Asia's largest country, but Wong said part of the reason for his appointment was to bridge that gap. “I am now looking at money from China investing outside. We are hearing that the Chinese government as well as China's private enterprises have accumulated enough assets and are looking outside of the country to invest.”
The number of big players has fallen by the wayside. Many of them are in positions to sell, not to buy.
Wong expects to raise funds from listed entities, high-networth individuals and state-owned enterprises via two current vehicles the group is marketing, the Asia Fund Select and the Enterprise fund. In addition, he predicts the Chinese government will increase the amount that government-approved qualified domestic institutional investors can spend outside the country.
Wong resides over Pacific Star's trio of offices in Beijing, Shanghai and Hong Kong, which together currently house 20 of Pacific Star's 200 staff. He plans to grow these offices to 40 people within three years and will then look to open more offices across China.
Wong was previously executive vice chairman of Shui On Land Group, a real estate company in which Pacific Star invested $150 million in May 2004. Pacific Star floated the company in an initial public offering in October 2006 in a deal which created an internal rate of return for Pacific Star of 150 percent. Wong said that deal was unusual but that Pacific Star traditionally targeted IRRs of more than 100 percent for company investments which were then publicly listed.
He acknowledged that sort of return was hard to attain now but said: “We are prepared to invest today and wait for the market to come back.”