QIC teams up with Ping An for cross-border deals(1)

Brisbane-based QIC has inked an agreement with Chinese asset management company Ping An as it looks to grow its business in China.

Queensland Investment Corporation, the investment arm of the state of Queensland has inked an MOU with Ping An Asset Management Company (PAAMC) to pursue more cross-border collaboration, QIC said in a statement.

Shanghai-based PAAMC is the asset management arm of China’s second largest insurer, Ping An Insurance, which has over 2.1 trillion yuan ($330 billion; €285 billion) under management.

“China is an important market for QIC given the rapid growth in Chinese domestic investment capital and increasing capital mobility between the nations,” QIC chairman Don Luke said in a statement.

QIC notes in the statement that between 2005 and 2015, total institutional assets in China grew 500 percent from $1.1 trillion to $7.1 trillion, with China’s total institutional assets estimated to reach $10.8 trillion by 2021.

Currently, most Chinese institutions allocate less than two percent of their total AUM to overseas investments. If Chinese institutional investors increased investments to up to a fifth of their AUM, this could represent about $2.1 trillion by 2021.

Luke added: “Australia is an attractive destination for Chinese capital given the maturity of our market, the quality of our asset management sector and reputation as an innovator in sectors such as infrastructure.”

Meanwhile PAAMC chairman Fan Wang commented that PAAMC and QIC will leverage each other’s investment specialisations to provide better investment solutions for both Chinese and Australian investors

QIC and Ping An are still finalising details of the agreement.

This is the first time QIC has entered into an understanding with a Chinese asset management institution. However in September this year, it led a consortium of investors, which included China’s $800 billion sovereign wealth fund China Investment Corporation, to acquire a 50-year lease of the Port of Melbourne.

The A$76 billion ($57 billion; €53 billion) investment manager QIC has been focused on the micro-cap space, growth and venture; about 30 percent of its global private equity portfolio is dedicated to venture or growth companies, an investment theme that has been in development since the programme’s inception in 2005.

Along with innovation-themed investments, QIC also invested a reported A$400 million in Australian cattle business NAPCo in May this year.