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Treasury Office Looks to Asia for Opportunity
by Chris Malins
The Treasury office is currently undertaking a major push to invest in the fast growing economies of Asia. Over the past year, the University’s endowment portfolio has seen a meaningful increase in Asian market exposure – in public markets, private equity, and real estate investments.
As most people in the Pacific Northwest know, trade and investment in Asia is growing very quickly for local companies that look across the Pacific Ocean. Washington’s historical trade in airplanes, apples, and timber are now complimented by investments in knowledge based exports. Financial market investments are starting to follow that two-way migration. In recent years, Washington has been among the top five US states for international trade on a per capita basis, and Asia has been the main engine of that growth.
Given that Asia accounts for over two thirds of the world’s population, yet far less than half of the world’s GDP – Asian economic growth potential looks strong. International capital markets have grown dramatically in the last decade, and the non-US portion is estimated to exceed 56% by 2006, according to various investment research sources. What does all this mean? The UW Treasury Office investment team is starting a multi-year research push to investigate Asian investment opportunities.
The first step is travel to Asia to visit companies and managers, as well as to understand the business culture and climate. This legwork is currently underway as the University’s portfolio managers – Scott Davies, Keith Ferguson, Elise Hebb, and Garth Reistad – have traveled to Japan, China, India, Singapore, Malaysia, and Hong Kong in 2005 to meet with investment managers and explore the intricacies of putting the UW portfolio to work in those Asian countries.
Recently, the UW has increased our investments in Japanese real estate, SE Asian regional equities, and Indian private equity. All of the endowment assets are invested in external managers, who in turn invest in public and private companies. The UW is embarking on a long journey of investment exploration. Research of great investment ideas is often a case of constant investigation. With this in mind, the UW investment team will spend more time traveling overseas, especially in Asia, as they look further abroad to gain greater investment knowledge of new growing economies outside the US. Over time, we hope to find more Asian investments with greater return expectations for future growth. |
