Chinese alternative investment can provide strong alpha generation opportunities for global investors yet there are also a few challenges ahead. Richard Johnston of Albourne Partners talks about the pros and cons of China’s alternative investments.
24 August 2020
Chinese alternative investments (hedge funds plus private market investments) have proved to be a strong alpha generator and caught increasing attention from global investors. Yet the manager selection, due diligence, and ongoing monitoring is no light job at all. Richard Johnston, Partner and Head of Asia for Albourne Partners, the alternative investment advisory firm for global institutional investors, talked about their extensive coverage of Chinese long-short, long-only, and private equity managers over the years. He shared his observation about the improvement on investment and operational sides that Chinese managers have made, but also pointed out the regulatory and structural issues that still exist. But his key message is that the Chinese alternative market has been such an important source of alpha and it remains to be underweighted by global investors.
“In general, I would say China is a source of so many alphas and I think it’s really hard to overlook it.