At a time when U.S. and European investment giants are pouring money into China's growing fund industry through joint ventures, a leading portfolio manager is using a different strategy to take advantage of the country's expected economic boom: investing in American companies that are looking to expand in China.
Thomas Marsico, founder of Marsico Capital Management LLC told Bloomberg News that his funds hold shares of GE Co. and FedEx Corp., which are rapidly pushing into the Chinese market. "We want to be exposed to companies that benefit from growth in the developing markets," he said.
Marsico feels this is a better strategy than foreign direct investment in China because of the stricter accounting and governance standards that U.S.-based companies must adhere to.
The Chinese economy grew 9% last year, according to the IMF, spurring several U.S.-based companies to seek additional profits in the fast-growing economy. GE, the world's largest company by stock market value, expects last year's $3.5 billion in sales to increase 45% this year and comprise 3% of total worldwide sales. FedEx, the second-largest U.S. package-delivery company, saw a 12% increase in shipments from outside the U.S., primarily in Asia, in the three months through November.
Marsico, who along with his team of 19 investment professionals watches out for one-of-a-kind growth companies to invest in, has achieved superior results for his fund company in the last two years. The Marsico Growth Fund holds, among others, stakes in companies such as Four Season's Hotels Inc. and eBay Inc. Both of these companies also have aggressive growth plans for China in the coming year.
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