​A-shares remain popular with foreign private equity firms

Renowned foreign private equities are piling up long-term stakes in the A-shares despite this year’s ups and downs at China’s stock market, according to a report by the Shanghai Securities News on Monday.

This year the A-share market has been going through continuous adjustments, but this did not scare off private equity companies from across the world, which saw unique attractions in it.

This year, 15 such well-known industry players obtained a license allowing them to raise funds via private offerings in China. As of now, 10 of them had already pooled investments and directed them mostly to China’s stock market.

In an interview with the Shanghai Securities News, the Schroder Investment Management (Shanghai) Company listed five reasons for its interest in China --- the opportunity to diversify its global investment portfolio, a huge selection of over 3,500 shares to choose from, high-tech manufacturers with global competitiveness, more excess returns, and attractive valuations.

The King Shun Investment Management (Shanghai) Co., Ltd. said supportive policies in China this year have added to the appeal of the A-share market by greatly facilitating the entry of foreign investors.

For these investors, consumption shares may remain the primary targets in the medium and long-term. In one of the fund products of the APS Asset Management Pte. Ltd., consumption stocks make up 39 percent of the investment mix.

This company believes that China’s economy will see long-term steady growth after its successful upgrading and transformation, and expects to see long-term stable returns from a batch of Chinese companies as this country boosts its manufacturing and service sectors.

For these foreign investors, value investing is a prominent feature in their business activities in China.

The Winton Capital Management Ltd. is one example, which persists in the pursuit of long-term capital gains. Since its entry into China in 2010, this company’s investments had generated an aggregate net return of 130 percent by the end of 2017.