UBS sets up US$100m outbound investment shop in Shanghai

UBS Asset Management announced on Thursday that it has created an entity in the Shanghai free trade zone to raise private funds in China to invest overseas via China's Qualified Domestic Limited Partner (QDLP) scheme. 

PHOTO: REUTERS

NOV 5, 20153:06 PM

[SHANGHAI] UBS Asset Management announced on Thursday that it has created an entity in the Shanghai free trade zone to raise private funds in China to invest overseas via China's Qualified Domestic Limited Partner (QDLP) scheme.

UBS said that the new company is a wholly owned foreign enterprise that will manage Chinese investments in both alternative and traditional overseas asset classes, with an initial quota of US$100 million.

"Our participation in the QDLP program enhances the access to the international markets for our Chinese clients," said Ling Xinyuan, China Chairman of UBS Asset Management, in a statement.

UBS is following other fund managers including BlackRock Inc , Och-Ziff Capital Management Group LLC and Man Group PLC, all of which are using their access through the QDLP programme to tap high net-worth Chinese individuals and institutional investors for cash to invest overseas.

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Unveiled in 2012, the QDLP licence is designed to allow foreign alternative asset managers, namely hedge funds, to raise funds onshore to invest offshore. The first round of licenses was granted in 2013.

In focus is how successful the QDLP funds will be, and how welcoming Beijing will be.

On the one hand China is trying to cautiously open its capital account to allow more outward portfolio investment flows, seen as key to winning greater international support for the yuan's inclusion in the International Monetary Fund's basket of reserve currencies, and encouraging more foreigners to hold yuan assets.

On the other hand, China is seeing record capital outflows as the yuan comes under depreciation pressure, and that could ultimately complicate the short-term goal of lowering domestic interest rates.

QDLP, along with its cousin the Qualified Domestic Institutional Investor (QDII) programme and the Shanghai-Hong Kong Stock Connect, all offer investors inside China the chance to invest more outside China.

However, so far QDII and the Shanghai-Hong Kong Stock Connect have struggled to attract Chinese investors, which fund managers have blamed on poor management and marketing, combined with perceived superior returns at lower risk from domestic assets.

REUTER
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Humble CEO generates higher return on assets: study

By

Angela Tanangelat@sph.com.sg

NOV 5, 201510:58 AM

COMPANIES with humble chief executive officers (CEOs) enjoy higher return on assets (ROA), according to a joint study by the National University of Singapore (NUS) and Arizona State University.

In the study published in the Journal of Management examining the relationship between CEO humility and company profits, researchers found that about 5 per cent of a firm's ROA is linked to CEOs rated as "humble" by their chief financial officers (CFOs).

". . . We find that humble CEOs indeed contribute indirectly to the pursuit of ambidextrous strategies and to firm performance, and they manage to do so through top management team integration and pay equality," Dr Amy Ou, assistant professor of management and organisation at NUS, said.

According to the research, which was also contributed by David Waldman and Suzanne Peterson from Arizona State University, when a more humble CEO leads a firm, its top management team is more likely to collaborate, share information, jointly make decisions and possess a shared vision.

The firm will also tend to have lower pay disparity between the CEO and the top management team, which will be associated with stronger firm performance.

The study examined 105 small-to-medium-sized firms in the computer software and hardware industry in the United States, with CFOs reporting on their CEOs' humility through a nine-item survey.

The researchers noted that their sample came mainly from privately held small and medium enterprises (SMEs). It remains to be seen whether the findings are generalisable to public or large firms, which may less likely have humble CEOs because they may have more competitive executive selection and succession processes.

The researchers also noted that in large corporates, humble managers may be less likely to rise to the top when they maintain low profiles and avoid taking credit for success. In addition, communication with other top management team members may be more formalised and political, and less frequent, compared with communication patterns in SMEs, so that humble CEOs will have less personal influence on top management team members.

Nevertheless, given the correlation between a company's profit and its CEO's humility, the researchers maintain that "boards of directors pay more attention to humility as a criterion of executive selection, and that human resource managers target humility in executive coaching".

"The implications of our findings are significant. It is typically assumed that the humble person is not assertive, lacks confidence, and the ability to motivate others. At worst, humility has been equated with being weak. Our study challenges that belief, showing that humble CEOs are more than just nice to work with and they are able to deliver extraordinary firm performance," said Dr Ou.

    
 

China says Disney to get special trademark protection 

NOV 5, 201510:53 AM

[SHANGHAI] China will give special trademark protection to Walt Disney Co as the iconic US firm prepares to open its first theme park in mainland China next year, a regulator said on Thursday.

Authorities will carry out a year-long campaign to crack down on Disney counterfeits, the State Administration for Industry and Commerce (SAIC) said, underlining wider concerns that fake products are damaging the country's reputation. "(This) will promote the development of a fair and competitive market, and protect China's international image for safeguarding intellectual property rights," the statement said, adding the "special operation" would run until October 2016.

China has struggled to shake off a reputation for fakes, from replica handbags to knock-off cars, which cause headaches for global brands such as iPhone maker Apple Inc and luxury retailer LVMH.

The SAIC statement added it would create "emergency teams"to help protect Disney trademarks, increase training for forces to spot illegal behaviour and boost monitoring of Disney counterfeits online.

More than 40 percent of goods sold online in China last year were either counterfeits or of bad quality, the official Xinhua news agency said this week.

Disney, which is developing the US$5.5 billion theme park with China's state-owned Shanghai Shendi Group, will be hoping it can tap into growth in the world's second-largest economy despite the country's recent slowdown.

Disney opened its largest store to date in Shanghai in May, and is tapping China's fast-growing film market. The latest film in its "Avengers" series took the number-two spot in the country's 20.4 billion yuan (S$4.5 billion) box office for the first half of the year.

Disney earlier this year delayed the opening of the Shanghai Disneyland resort until the first half of 2016 from a previously scheduled start at the end of 2015.

REUTERS