UBS Finally Gets New Manager for Fund Ensnared in China Property

(Bloomberg) -- UBS Group AG has found a new manager for the fund caught out by China’s property turmoil, ending a five-month gap in permanent leadership.

Raymond Lin Gui will join the Swiss bank’s asset management unit in Hong Kong in May, according to an emailed statement. As the head of portfolio management for Asia fixed income, he will be the lead manager of the $2 billion Asian High Yield fund. 

Gui was previously co-chief investment officer at Hong Kong-based Income Partners Asset Management. His appointment comes after the former manager Ross Dilkes left UBS after 16 years in November. 

The Asian High Yield fund has been suffering losses stemming from the property crisis engulfing China Evergrande Group and other developers in the region. It lost about 15% so far this year, according to data compiled by Bloomberg. More than 30% of the portfolio is exposed to real estate, according to an investor update for February. 

Since Dilkes’ departure, assets have tumbled by about $1.2 billion due to both poor investment performance and investor withdrawals.

At the end of 2021, the fund held big stakes in dollar-denominated bonds issued by several troubled Chinese developers, including Evergrande, Kaisa Group Holdings and Sunac China Holdings, according to data compiled by Bloomberg. All three have missed payment deadlines on some of their debts and their shares have been suspended in Hong Kong, with lengthy restructurings looming across the Chinese property industry. 

The fund also had more than 2% of its holdings in Sri Lanka coming into March, according to investor documents. The country halted payments on foreign debt earlier this week.

Smit Rastogi, who has been at UBS for over five years, has also been named co-manager of the fund. 

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