When Robert Lloyd George paid a visit to his Hong Kong office last week, his fund managers must have thought Chinese new year had come early.

With only a few days left until the lunar new year, China's most important holiday, key staff members were looking forward to receiving their annual bonuses, after an intensive "career chat" with their boss.

"They were pretty happy about their bonuses," insists Mr Lloyd George, founder and executive chairman of the eponymous fund management boutique, which is 67 per cent owned by its staff. "The bulk of our profits are paid out to our executives, which is something that some of our bigger rivals might be jealous about."

Over the past 18 months, the company has doubled its assets under management to $5.2bn (£2.5bn), reflecting a marked increase in US investments into Asian funds. It is something few industry experts would have expected 15 years ago, when Mr Lloyd George published his second book, The East West Pendulum.

"This was my long-term vision of China catching up with the west and going back to where it was before 1800, in terms of relative per capita income and technology development," he says. "That has all happened far faster than I ever dreamed."

A great-grandson of David Lloyd George, the first world war prime minister, he may have a slight predisposition for taking the long view.

As for the short term, he believes China will soon shed its image as an imitator of western products and technologies.

"I think we'll be surprised by the number of patents and innovations coming from China," he says. "Biotechnology is seeing a kind of unfettered growth because there aren't so many ethical constraints as there might be in the US."

Yet, while he is unashamedly bullish about China's economic development, he has shunned the country's murky stock markets, where the state controls two thirds of the equity of listed companies.

The Shanghai composite index, which dropped 14 per cent in 2004, hit a six-year low two weeks ago.

His company has focused on indirect ways of investing in China's economic miracle, spotting international companies that benefit from long-term trends such as rising commodity prices.

"A very important pointer to the future is the interest by China National Offshore Oil Corporation [CNOOC] in Unocal," its California-based rival, he says. "I asked my team to analyse who has the energy assets that might become a target for Chinese or Indian acquisition."

Mr Lloyd George also points to the expected surge in the number of Chinese tourists over the next 10 years - a boom likely to affect companies in the leisure and retail sectors.

"I don't think Europeans have quite appreciated the size and extent of this phenomenon," he says.

"Take the daily gambling turnover in Macao, which is now considerably higher than Las Vegas, thanks to 1.5m Chinese visitors a month last year."

Mr Lloyd George's optimism is only tempered by his concerns about the relatively poor standards of Asian corporate governance. He points to the recent collapse of Singapore-listed China Aviation Oil, the largest financial scandal to hit an overseas listed Chinese state-owned company.

"I said to my team that this year I wanted them to focus on the majority shareholders behind each company in which we invest," he says. "In India, we have found that the majority shareholders are usually aligned with us, which hasn't always been the case with the Chinese."

Hence his reliance on his three Chinese founding partners, whose local expertise has been an important part of the company's "risk control".

The company, which has offices in London, Hong Kong and Bombay, employs 10 portfolio managers.

"Since the launch of the company in 1991, we have neither changed our capital structure nor our key staff members, while some bigger houses have gone through big personnel changes," he says."

This has not been lost on investment consultants, such as Frank Russell and Mercer Investment Consulting, which have included the company in their multi- manager products. Its client list includes institutional investors such as Northwestern University, the Swedish National Pension Fund and the City of Edinburgh.

Lloyd George Management also manages funds for Eaton Vance, the US mutual fund house, which owns 20 per cent of the company.

Before starting his own business, Mr Lloyd George, an Old Etonian and Oxford graduate, was head of Indosuez Asia Investment Services, now part of Crédit Agricole, where he pioneered single country funds.

At his own firm, he has focused on Asian small and mid-cap companies in two categories - Asia, excluding Japan, and global emerging markets.

While his institutional mandates largely outperformed their benchmarks in recent years, his flagship $90m Asian Smaller Companies fund underperformed its benchmark by nearly 20 per cent last year, reflecting a misjudgement of India's parliamentary elections.

He concedes that such "hiccups" will continue to surprise investors in Asia, but insists the region will become hard to avoid as the global balance of power shifts in its favour.

"We have a lot of European interns coming out to Hong Kong and I always say: 'You should go to China, because this is what you will have to deal with for the next 50 years - whether you like it or not.'"

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.