Ashmore says central banks upping emerging debt exposure

LONDON (Reuters) - Central bank clients of fund manager Ashmore are raising their exposure to emerging market debt and favouring local-currency bonds to diversify out of their U.S. dollar holdings, said a member of its investing committee on Wednesday.

"We manage increasing amounts of money from central banks that are seeking to increase their exposure to emerging markets and we have had conversations with at least 50 institutions that include central banks and governments," Jerome Booth, head of research at Ashmore Investment Management, told Reuters.

Central banks were becoming more comfortable with emerging debt because of the growing liquidity of the asset class, he said.

A source told Reuters in June that Ashmore was among the eight overseas asset managers expected to be mandated by China's sovereign wealth fund to each run a $250-$600 million (126-300 million pound) emerging markets fixed income fund.

Booth also said about 13 percent of Ashmore's assets under management were allocated by its government clients, primarily central banks.

The firm, an emerging markets specialist, reported assets under management of $37.5 billion as at end-June.

"Most of our central bank client (portfolios) have dollar-denominated emerging debt but all of them have local-currency emerging debt," Booth said.