Permal hires China expert as chief adviser

Fund of hedge funds manager Permal has announced its second senior appointment in as many months, hiring Zhiwu Chen, professor of finance at Yale University, as a consulting chief adviser.

This follows the $23bn asset manager hiring Paul Jeffries in May, from UK pension fund Railpen, to head its UK institutional business.

Chen (pictured) will work with Permal’s investment committee, which governs investment strategy allocations at the $23bn alternatives manager.

The appointment will also give Permal added insight into China, the world’s second largest economy, as Chen has written widely on China’s economy, emerging markets, securities valuations and capital markets.

He has been a visiting professor at Peking and Tsinghua universities, and also was associate professor of finance at The Ohio State University.

Isaac Souede, Permal Group chairman and CEO, said: “Zhiwu is a tremendous asset to the Permal Group and brings an additional dimension to our business. China and the Far East has for a number of years been an important focus for our business and Zhiwu’s thinking and insight on these particular markets, as well as wider financial markets and investment, is hugely valuable.”

Chen said: “As China continues to grow, both domestically and also on the world stage, it is increasingly important that asset managers have the best possible understanding of the market, its policies, and the likely impact on global markets.”

Outside the US and UK, China is home to a larger proportion of emerging markets hedge fund management firms than anywhere else, with 28.4% based there, according to Hedge Fund Research.

Asia ex-Japan, including China, is also the geographic focus of more developing markets hedge funds than any other region, with 47% concentrating on that area. Some 31.6% of all assets in developing market hedge funds are invested in the region, too.

Asia ex-Japan hedge funds made 0.68% this year to 30 April, compared to 3.68% from the Shanghai Composite equity index, and 9.05% from the S&P 500. Last year they made 10.8%, after 37.5% in 2009, however, in 2008 they had lost roughly one third of their value, according to HFR.

David Walker

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