00:00You were inside just now and listening to some of the panels. Anything stand out to you?
00:05Well, first of all, it's great to have all the vibe again in Hong Kong. Very impressed by it.
00:09Well done, HKMA, to have organized that great event. All these CEOs effectively in the room.
00:15I do believe that there is a case for, you know, investing again in the markets in the long term.
00:20As you mentioned, there could be eventually a drawdown, as some of the peers have mentioned it.
00:24Yet there is a belief in that the market will continue to grow in the medium or long term.
00:28So you don't want to be missing out that growth, but not be afraid of having a market correction eventually.
00:34What is sort of the, how do you build that resilient portfolio now?
00:38When you look at geographies, strategies?
00:40It's an excellent question. I think what's key and what we learned from all these tariff issues that launched by Trump in April,
00:48you remember where we were all and where the markets were.
00:51I think the key message we've heard, key lesson learned is diversification.
00:55Clients were overly invested in the U.S.
00:59And now we've seen diversification geographically.
01:01More flows coming into Asia, more flows coming into Europe as well.
01:05And so in terms of asset classes as well.
01:07Equity, fixed income, but also private market.
01:09And we want clients to build their private market portfolios,
01:13not only institutional clients, but also retail investors progressively benefiting from,
01:17let's say, the excess return private market can offer over public.
01:21So as a consequence, we've seen effectively clients slightly divesting from the U.S.
01:26And we've seen more flows in Europe, but also in Asia we benefited from it.
01:30So I want to pick up on the private market comment because it's become from something that's nice to have to must have really for many investors.
01:39What type of investors do you think need to have private market exposure?
01:43And why do you think that's critical at this point?
01:45I think I'd like to start with the why.
01:47Why, I mean, should investors benefit from private market?
01:50You have great firms out there that are decided not to be listed.
01:54It's a choice.
01:55And they can provide great returns, both in the equity format or in private credit format.
02:00So private equity or private debt.
02:02Why not benefiting from it if you think about it?
02:04So our role is to provide the wider universe of investments to investors out there.
02:10So first and foremost, institutional clients have been investing a lot into the private market space.
02:15And we talk more and more about democratization of private market.
02:19I just want to say a few words about it on these retail customers.
02:22First and foremost, you need to educate them.
02:24You need to educate the intermediaries who promote those strategies.
02:28And you need to make sure you have the right regulatory framework behind it.
02:31So LTIFs in Europe, continental Europe, or LTAF in the UK are great regulatory schemes or vehicles that help investors, retail customers, invest into private market products.
02:44Then you need, as I say, educational programs.
02:46We build a very heavy one where we decided first to provide the best of private credit of M&G to private clients with nine educational models,
02:56where we educated our, let's say, intermediaries, financial advisors, private bankers, so on and so forth, themselves to know how to position such a product to clients.
03:05It's really critical to really explain all the terms of such strategies and why investing in private credit as a good diversification to public credit for retail clients.
03:15It seems like everyone's kind of delving into this space, right?
03:18As we see this kind of private market boom continue, does it make it easier or harder for you to kind of sort and look out for actual quality sort of companies now?
03:27Does it make it harder?
03:28I think what matters the most indeed is to believe in your fundamentals, to have strong risk management processes.
03:36We rely on a very big research team, credit research team.
03:40We review a lot of companies, a lot of, you know, potential investments.
03:44We probably invest only in less than 30% of them because we tend to be extremely selective in where we deploy clients' money into.
03:52So it's important to always have those philosophies of investment and stick to it because quality matters in the long term.
03:59Can I ask you about your plans in the region?
04:01I think you just mentioned you've renewed your license for here in Hong Kong.
04:04Just help us understand what your growth priorities are.
04:06Yeah, in Asia, absolutely.
04:08Probably also going back first to private markets before.
04:11As a firm, we managed $440 billion, roughly, almost $100 billion in private markets, $340 in public markets.
04:19If I look at now the split geographically, we've been coming and accelerating in Asia more recently.
04:26We managed probably $55 billion in dollars of various Asian asset classes, equity, fixed income, and real estate mostly.
04:35Okay.
04:35We have close to 200 people across Asia, and we've been growing more and more.
04:39We've extended our license in Hong Kong to access more retail customers in Hong Kong.
04:44We've partnered with the largest broker in China, Guotai Hanong, and they are our partner now promoting the best of energy products for Chinese customers.
04:55Okay.
04:56What's sort of the conviction around China now?
04:59I mean, it seems like right now, you know, equities are in a bull run.
05:03You know, what is sort of the sentiment around the mainland now when you have your conversations here?
05:08So we launched, by the way, a Chinese equity strategy, but also a Chinese credit strategy last year.
05:14We're very proud of that.
05:15Last week's meeting between Mr. Trump and President Xi was quite revealing to feel that there could be a win-win from a terrorist standpoint between the two largest superpowers of the world that will benefit from, let's say, investors and also any operators in China.
05:32So we are positive, therefore, today, as we have a better perspective on where and how to invest in China.
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