A visit to Belfast last week by China’s provincial pension funds manager, the National Committee for Social Security Fund (NCSSF), to meet its Northern Ireland counterpart could signal offshore investment intentions, according to sources.

Those familiar with the Chinese pension system told IPE the trip could be a precursor of more to come as the NCSSF familiarises itself with the practicalities of offshore investment with foreign counterparts such as the Northern Ireland Local Government Officers’ Superannuation Committee (NILGOSC).

NCSFF officials met with their counterparts at the £6.6bn (€7.9bn) NILGOSC, a global investor responsible for managing Northern Ireland’s largest investment fund.

In a statement, NILGOSC chief executive David Murphy said the meeting covered pension fund management and governance.

“We face similar challenges and were able to share forecasts for the UK markets in the light of Brexit and wider global markets,” he said.

Nicholas Britz, senior associate with Z-Ben, a Shanghai-based asset management consultancy, said: “It’s an interesting one.”

He said the dialogue with NILGOCS would certainly have touched on comparative pension management structures – and how respective best practices could be leveraged.

But such dialogue would be standard and regular practice, he pointed out.

“Europe remains a key destination for Chinese outbound institutional investment,” Britz said. “If I had to call it, I believe they are likely to be investigating long-term investment opportunities – whether PPP or with third-party managers – that would allow them to enter LP arrangements.

“This plays to the fact they heavily mandate out the offshore portfolio, as opposed to running it in-house. I have no doubt global asset managers would be positioning to get some face time with the delegation.”

Others who spoke to IPE  believe that, with investors such as China Investment Corporation (CIC) or SAFE Investment Company, the investment arm of the State Administration of Foreign Exchange (SAFE), NCSSF would be “a passive investor” over a relatively long investment horizon.

The NCSSF, which oversees CNY1.5trn (€206bn) in social security funds, recently named 21 companies, including seven with offshore affiliations, to handle domestic equities investment. 

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