After China, Eastspring sets up in Thailand

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Eastspring Investments has reached an agreement to acquire 65% of Bangkok-based TMB Asset Management from TMB Bank, with the option to increase its ownership to 100%.

TMB AM is the fourth largest asset manager in Thailand, with $12.3bn in assets, excluding fund of funds, as of the end of March, according to a Cerulli Associates report.

The move follows Eastspring’s establishment of an investment management wholly-foreign owned enterprise (IM WFOE) in Shanghai in March.

The completion of the transaction is subject to regulatory approval, according to a firm statement.

Thailand stands to be be the eleventh country in Asia in which Eastspring, which manages $183.5bn in global assets, has set up shop. Other operations are in China, India, Indonesia, Hong Kong, Japan, Malaysia, South Korea, Singapore, Taiwan and Vietnam.

Hot Thailand market

The acquisition is a testament to Thailand’s burgeoning investor base clamouring for offshore investment products. Other factors are also in play. Thailand is expected to enter a multi-country fund passporting scheme in August. Additionally, Thailand’s regulations are slowly relaxing, allowing more domestic capital to invest offshore. High net worth investor assets grew 13.3% in 2016 year-on-year to $548bn, according to the latest available figures from Capgemini.

Thailand’s mutual fund industry assets have nearly doubled to $124.8bn as of the end of March from $62.9bn in 2012, according to Cerulli data.

Eastspring will be joining other foreign asset managers that have already established an operation in Thailand. They include Standard Life Aberdeen, Singapore’s UOB Asset Management and Malaysia’s CIMB-Principal Asset Management, which is the joint venture between Malaysia’s CIMB and US-based Principal.

Offering feeder funds in Thailand has always been the most viable channel for foreign asset managers rather than establishing an on-the-ground presence, Quah Chi Chin, Singapore-based associate director at Cerulli, said previously.

“It is interesting because foreign managers are seen as a competitor if they have an on-the-ground presence. That’s why the likes of Aberdeen and CIMB-Principal have not really done so well in Thailand,” she said.

An Eastspring spokeswoman said that the firm intends to operate under a co-branding structure for a few years. “This will ensure consistency for current TMB AM clients and allow time to establish the Eastspring brand in Thailand.”

As part of the acquisition, the firm also entered a distribution agreement with TMB Bank to provide investment solutions to the bank’s customers.

Eastspring’s parent, UK-based Prudential, has been operating in Thailand for at least 20 years, the statement noted. As of the end of 2017, it managed around THB 90bn of domestic insurance assets.

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