APG Asset Management allocated €75 million ($82.6 million) to its first local currency China fixed-income strategy with E Fund Management and will manage the allocation with a sustainable focus, a spokesman for the manager of the €459 billion Stichting Pensioenfonds ABP, Heerlen, Netherlands, said.
Also, APG Asset Management opened offices in Shanghai and Beijing to underline its long-term commitment to China, the firm said.
APG is taking the first steps in the Chinese credit market and gaining experience before expansion, which can happen quickly as China's fixed-income market continues to grow 20% annually, the spokesman added.
The fixed-income strategy is APG's second China investment next to its €594 million China A Shares strategy that launched in early 2018, also with E Fund. APG previously had exposure to Chinese central government bonds in hard currency in its active emerging markets debt strategy.
"With the Chinese market opening more to international investors, this is a good opportunity to get solid returns with relatively low risk in current low yield environment," APG's Sandor Steverink, head of treasuries at APG's asset management division said in a Nov. 29 news release.
"To execute this strategy successfully, we need to have people present in China," Mr. Steverink said. "By having our own office locations in China, we can work closely and better with our partner E Fund, who is just a short walk away from our Beijing office."