It will be those economies without debt that will take advantage and buy cheap Western assets needing to be sold. China and Qatar seem to be leading the way on this. There are several others that are going about this with a much lower profile. Brazil, Malaysia, Indonesia and Korea are some examples.
I am in Korea today and it is a relief to escape the relentless bad news and hear a positive story seeing the benefits of a prudently managed financial system. They have rules that require separate custodians from asset managers and until recently haven’t allowed ‘shorting’. Domestic managers will begin to learn about developing ‘hedge’ funds but they will progress slowly into strategies that are easy to understand.
Is this an opportunity for a global fund administrator to set up in business or will the local administration firms add to their skill sets? If the fund managers develop simple ‘hedge’ strategies then local providers should be able to grow their skills at the same pace. If the managers try and run before they can walk in the alternatives world then there is scope for a skilled global player but I don’t think that is the Korean way.
It is refreshing to see a positive financial system for a change but that’s enough good news for one day. Its time to head back to Heathrow and see how much delay the immigration staff strike will add to the 22 hour journey.”