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To: John Hauser who wrote (11080)	12/12/1997 10:47:00 AM
From: Mohan Marette	Respond to of 97611

WE love America-The rich asians are coming to Invest in the West {source:Forbes digital tool) John and thread: Interesting article. Rich Asians are suddenly much more interested in investing some of their wealth in the U.S. and Europe. Wonder why? Change of heart By Andrew Tanzer ONCE A YEAR Pierre Rolin, head of Credit Suisse Private Banking's international real estate practice, leaves his base in London to tour Asia to visit many of the bank's wealthy Asian clients. This year he noticed a sea change in their attitudes. Previously they had shown little interest in buying Western real estate. Why should they, when there were so many lucrative investments right in their backyards? It was not uncommon for wealthy overseas Chinese to brag that they would never bother to invest, for example, in the U.S. But in October many of the wealthy Asians were eagerly grilling Rolin on yields and projected long-term income streams from properties in New York and London and Paris. "We're going to see a lot of [Asian] investors diversifying into the U.S. and European markets," Rolin predicts. "The turmoil [in Asian markets] has had a fundamental impact on the way they think. Preservation of capital was what they were talking about." Fund managers and private bankers in Asia tell a similar story. For years they had urged customers to diversify, to move more of their eggs out of the Asian basket. The advice pretty much fell on deaf ears. Investors were confident the region's growth would continue uninterrupted and that its markets would only go up. "Asian investors have been guilty of running the risk of nondiversification," asserts Anthony Moody, head of Asia Wealth Management at Bank of America. "They thought that modern portfolio theory doesn't apply in Asia. Up until now there haven't been enough bear markets to force them to come to terms with risk-taking." There's nothing like a market crash to focus the mind. With their slumping stock and property markets and wilting currencies, Southeast Asians have lost 50% to 75% of their wealth in just a few months. Suddenly that piece of Cartier jewelry again looked expensive to many of them. Even Singapore hasn't been immune to the Asian flu; its currency has fallen 13.5% against the U.S. dollar this year after appreciating steadily for over a decade. "What we've seen has been so painful for so many investors that I don't think the level of concentration for Asian investors in Asian markets will ever return," forecasts Jeremy McAteer, head of the private banking investment group of UBS Private Banking. Credit Suisse's Rolin says that more than half of the money pouring into new London residential developments this year has come from Asia. Asian investors who until recently scorned investments in the West as tame, low-potential risks are having second thoughts. Assets in one Templeton Franklin global fund marketed in Asia have multiplied from under $100 million to $750 million this year, and Asian investment in a Templeton global emerging markets fund has recorded a similar jump. More than one-third of the money Fidelity has attracted in Hong Kong this year has been funneled into its European funds, up from less than 10% in the industry last year. "[Investors] are starting to realize that they can invest with a little lower return than before in Asia, but with reduced risk and overall portfolio volatility," says Bruno Lee, of Fidelity Investments Asia-Pacific. "Asians thought they knew better than the fund managers, but it's beginning to dawn on them that they don't outperform the specialists," comments Stewart Aldcroft of Templeton Franklin Investment Services (Asia) Ltd. "People only learn lessons the hard way." Good news for Western financial institutions with global investment capabilities, such as Credit Suisse, Citibank, Merrill Lynch and Fidelity. Private banking for the rich is a well-established, growing business in Asia, but its nature may now change. Traditionally, rich Asians wanted to control investments made from their accounts and were much less willing to cede discretionary mandates than their counterparts in the West. They made the money in a decade or two as entrepreneurs, and they wanted to manage it themselves. Says Andrew Chan of Merrill Lynch International Private Banking Group: "They're listening to us more now and asking how to protect their positions." Comments Credit Suisse's Rolin: "The very wealthy [Asians] are starting to think more like the rich in Europe and North America, who are interested in preserving capital for the next generation."