JP Morgan fund invests in China, India

Mon Mar 15, 2010 8:26am IST

* A quarter of $860 mln invested; focus on China, India

* Bought into cement, water and hospital firms

* To complete investments in next couple of years

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 By Lee Chyen Yee and Parvathy Ullatil

HONG KONG, March 15 (Reuters) - JP Morgan (JPM.N: Quote, Profile, Research) Asset Management has invested almost a quarter of its $860 million Asian infrastructure fund in China and India assets, as part of efforts to complete investments in the next two years.

The Asian Infrastructure & Related Resources Opportunity Fund invested in cement and water treatment companies in China and a hospital in India over a month after the fund was closed, said Philip Jackson, chief of JP Morgan's Asia infrastructure investments group.

"Ten or 15 years ago, Asia was an optional, alternative investment as a geography. The teenager has come of age and I find it hard to believe that any global investor   could really not have Asian investment as a core part of their holdings," Jackson said.

"Clearly we anticipate China and India will be the two largest markets, but frankly we are anticipating we could be investing equally easily in Korea or in Southeast Asia," he told Reuters in an interview late on Friday.

Heady economic growth in China and India has enticed investors to tap the potentially lucrative emerging economies whose populations make up a third of the world's. 

Jackson said the rationale behind investing in Scitus Cement in China's southwestern province of Guizhou was that the region needed huge resources such as cement to build up its infrastructure network.

"(Guizhou) is about the size of California. It is very mountainous and it needs a lot of infrastructure. And the infrastructure is not going to be built if the cement isn't available," said Jackson, who has been living in Asia since 1993.

The fund also invested in a water treatment company that operates in China's southern boomtown of Shenzhen called Goldtrust Water, and India's SevenHills Hospital, which is expanding in Mumbai, he said. 

JP Morgan Asset Management, which has global assets of around $43 billion in the real estate and infrastructure sectors, has been actively scouting for assets in Asia, where economies are growing solidly compared to the rest of the world. 

Apart from the infrastructure fund, the management arm has a $350-million Indian property fund and another in greater China that raised $600 million.  Infrastructure has become a distinct asset class over the past few years, with banks such as JP Morgan, Citi (C.N: Quote, Profile, Research), Macquarie (MQG.AX: Quote, Profile, Research) and Morgan Stanley (MS.N: Quote, Profile, Research) sponsoring funds. 

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(Editing by Jonathan Hopfner)

Source: Reuters India