Spy found himself in Kuala Lumpur this week drinking cheap whisky, in a cheap bar, with some rather colourful people. In the “buy anything” world in which we are living, even Malaysia seems to be getting a little spring back in its step. The Teflon prime minister who, conveniently, discovered $700m in his bank account a few years back, seems, at least temporarily, to have evaded his critics. The oil price is above $50 and palm oil is above $600 per tonne. Yes, Asia’s “almost economy” is bouncing back. Local asset and wealth managers appeared rather enthusiastic for the first time in years. For foreign asset managers who have been avoiding KL for the sunnier skies above Bangkok, Spy sensed a few deals could be done. If nothing else, when was the last time you had a really good laksa?
Spy mistakenly believed that with so few people moves of late, the industry was settling down and staying put for the long haul. Well, if not the long haul – at least until bonus season is out the way…Not a bit of it. A flurry of changes have come across Spy’s desk this week.
News has reached Spy that Michelle White has stepped down from Capital Group in Singapore. Michelle was supporting Cap Group’s efforts in the wholesale distribution space in Singapore and Hong Kong as the business expanded in Asia from its original institutional focus. There is no news of Michelle’s replacement yet. It is understood that Michelle is staying in the industry in Singapore, albeit with a slightly different remit, at the firm she is moving to. Christian Leger, based in Hong Kong, continues to focus on wholesale business development. Capital have been promoting their global equity New Perspectives Fund which is up a healthy 24% over the last year.
A change has reached Spy from JP Morgan Asset Management in Singapore. Tze Hui Cheam, who has been handling marketing for Southeast Asia for the last four and a half years, has reportedly left the business. Spy, sitting in Kowloon, has no news on where Tze Hui is moving to. JP Morgan AM has had a stellar run with its Pacific Tech fund, which is up a stunning 41% over the last year. The American manager has clearly had no problem investing in the rising giants of China’s tech boom.
Standard Chartered has lost one of its most experienced investment specialists. Wee Teck Tay who was head of private equity and real estate within the wealth management division for the bank, has stepped down from the business. Wee Teck held various roles with Standard Chartered over the last six years and was at Bank of Singapore before that. Spy hears he has moved to Deutsche Bank where he will be head of private markets. It’s not clear whether his replacement will come from an internal or external appointment.
At Bank of China in Singapore, Spy has come across a change of roles. Bryan Pee who has been responsible for third party fund analysis, is moving roles. It is understood he is moving to a more client-focused position. He has been replaced in that role by Priscelia Wan, understands Spy.
One of Spy’s secret squirrels was a guest at an Aberdeen Standard adviser/client seminar this week. Aberdeen was promoting their Aberdeen Pacific Equity Fund which, rather unusually, invests in regional Aberdeen funds and individual securities. Whilst Spy has every interest in quality Asian investments, it was the premium given at the event that really caught Spy’s eye: Little bottles of 12-year old Speyside Scotch. The bottles were clearly produced before the Standard Life/Aberdeen merger and therefore will have outdated branding fairly soon. Spy’s message: any unwanted bottles are most welcome at the Fund Selector Asia offices. Spy knows that the whisky inside cares little for the label on the outside and, unlike company branding, seldom goes out of date!
The robo adviser land grab is gathering pace with the launch in Singapore of Stashaway. With adverts on the MRT (see below) and a shiny website, the robo is making a big play in the Lion City. According to their website, the robo adviser is exclusively using ETFs for portfolio construction, has no lock-in period, no minimum investment level and very low fees. And, indeed, those fees are low. They begin at 0.8% per annum for the first S$25,000 ($18,268), incrementally dropping as assets are added until cash above S$1m is only charged at 0.2% per annum. Spy will be watching carefully. If their model is successful, it could well be major disruptor.
Hang Seng Bank periodically adds to its list of funds available in Hong Kong for customers and conveniently publishes the list.
Excluding different currency classes, Spy identified 10 new additions of late:
- Schroder Global Inflation-Linked bonds
- HSBC Asia Pac ex-Japan Equity High Dividend
- Fidelity Global Financial Services Fund
- Franklin Global Real Estate
- Investec Global Multi Asset Income
- Allianz US Short Duration
- JP Morgan Multi Balanced
- BlackRock Japan Small and Midcap Opportunities
- Fidelity Japan Smaller Companies
- Fidelity Asia Pacific Dividend
Apart from the fact that not many boutique firms are listed, which one of those funds caught Spy’s eye? The Fidelity Global Financial Services Fund. Financial services, especially banks, have been a thematic no-go area for years, especially in light of the GFC. Clearly, Hang Seng is feeling confident about the future and about the industry. It is putting its money where its mouth is.
Is China getting serious about its environment? Spy strongly suspects so. This week, Spy spotted a new opportunity to play that market. ETF provider, Krane Shares, which is majority owned by CICC, the Chinese investment bank, has recently launched its MSCI China Environment ETF (KGRN) in New York. The underlying MSCI index focuses on alternative energy, sustainable water, green building, pollution prevention and energy efficiency. One fact included in their IPO presentation is that China is investing $360bn in renewable energy by 2020. 100 billion here, a 100 billion there and pretty soon you are talking about real money.
Have you been shown some lovely charts starting in the bottom left hand corner and rising steadily to the top right hand corner, with the obvious implication that things will go on like that into the future? Of course you have! Our industry is obsessed with graphs and charts. Sadly, as much as they should mean something, they seldom do, suggests Spy. Do you want a perfect reminder? The analogy used by the smug but annoyingly correct Nicholas Nassim Taleb is a good one, especially as American Thanksgiving is around the corner. Taleb highlights in his bestselling book, “The Black Swan”, that the life of a turkey plotted for growth looks perfect for a thousand days…until its gets sent for slaughter. Enough said.
Barely a week goes by that Hong Kong’s tram industry does not benefit from asset management firms plastering their trollies with advertising. This week, Axa Investment Management is asking people to invest in tomorrow…while listening to yesteryear’s LPs.
Stashaway, the new robo adviser mentioned above, is in the MRT in Singapore at Marina Bay Financial Centre. This sort of advertising does not come cheap and it highlights the key challenge for robo advisers with thin fees: the clock is ticking to gather a large pool of assets.
Until next week…
