Natural Resources: A Closer Look at Asia-Based Investors - April 2016

by Della Lin

  • 25 Apr 2016
  • NR

With greater investment in Asian renewable energy by domestic governments, investors in the region are looking to increase their exposure to energy assets; both China-based Ping An Trust and Bhutan-based National Pension and Provident Fund plan to increase their Asian renewable energy exposure over the next 12 months. This blog will take a look at how Asia-based investors access the natural resources asset class and how renewable energy fits into their overall energy preferences.

Preqin’s Natural Resources Online contains detailed information on 72 Asia-based investors actively investing or considering investing in natural resources. Insurance companies make up the largest proportion (18%) of the Asia-based investor universe, with investment companies and banks following behind, each representing 11%. Two-thirds of Asia-based investors invest in natural resources through unlisted funds, compared with 42% that invest directly in assets.

Geographically, the majority (56%) of Asia-based natural resources investors are located in the Far East, with Japan (18%), South Korea (17%) and Singapore (15%) together constituting just over half of the investor population. Greater China is home to 29% of this investor universe, of which 38% are located in Hong Kong. The remaining 15% of investors are split between South Asia (11%) and Central Asia (4%).

Eighty-four percent of Asia-based natural resources investors indicate a preference for energy investments, surpassing those with a preference for agriculture/farmland (40%) – the second most preferred industry. Of those Asia-based investors that indicate a preference for energy strategies, 70% opt for traditional commodities such as oil, natural gas and coal. As shown in the chart above, Asia-based investor appetite is strong for natural gas investments, with 67% of LPs indicating a preference for this energy type. While fewer Asia-based investors target exposure to renewable energy, this sector is still a preference for over half (56%) of these investors.

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