What slowdown? Arch Capital is still upbeat on China’s property market

Richard Yue, co-founder of boutique real estate private equity management company Arch Capital, was formerly a director of Investment at AIG Global Real Estate, which had a real estate portfolio of over US$6 billion across Asia. While with AIG, he was in charge of the HK$3 billion acquisition of Hotel Furama in Hong Kong in 1999. Prior to AIG, he was at Citigroup (Real Estate Banking and Asian Debt Capital Markets).

Yue experienced political and economic instability in Hong Kong in 1989 when he came back to the city after completing studies in Canada. He made his first property investment in April that year, just two months before the Tiananmen event in China. “I almost wanted to go back to Canada,” Yue recalls. Yue has since witnessed ups and downs in Hong Kong and mainland China’s property markets for 26 years, and has learnt how to survive the market’s mood swings.

When is the right time to invest?

I always tell investors that whenever there are a lot of negative news in newspapers, there are a lot of investment opportunities. You cannot be an opportunistic investor if you are scared reading negative news. For us, we take medium- and long-term views. Once we identify the market, we follow and wait for opportunities. The most important thing is that when there is a downward cycle, you have liquidity to invest.

What made you set up your own firm?

I noticed that many real estate funds were owned by either global banks or insurance groups. Their buying decisions had to go back to their global headquarters, which is time consuming. If you do not understand Asia real estate and cannot make quick decision, you cannot win. On the other hand, in 2006, there were lots of global capital entering Asia. I grabbed the opportunity to set up the company.