Hong Kong-based Prudence Investment Management thinks investors should switch to Chinese consumer sectors as the country’s property sector credit will offer fewer opport
Hong Kong-based Prudence Investment Management thinks investors should switch to Chinese consumer sectors as the country’s property sector credit will offer fewer opportunities compared to last year reported Reuters this week. With borrowers in the property sector unlikely to feel any relief from Beijing’s monetary policy, sectors such as consumer goods, resources and utilities would provide more stable cash flows with Prudence co-founder Yuan Wang (pictured) quoted as saying: “I see the property sector as consuming too much resources and not productive enough.” The hedge fund firm was established in 2008 by Wang along with Dr Philip Po-him Wu and Chad Liu and also has a presence in Shenzhen, Beijing and Shanghai. Wang said that even if credit eases slightly on the mainland “it’s not going to benefit the property sector”. The firm’s USD250million China-focused credit hedge fund, Prudence Enhanced Income, has returned 193 per cent since inception in January ’09 and is up 0.16 per cent in 2011. The fund returned 4 per cent last month. Despite shrewd investments in the property sector helping to generate nearly 48 per cent returns in 2010, the portfolio currently has no exposure to it. China’s State Council last week said it would “unswervingly” maintain property curbs for the rest of 2011.