ASI has become the first global mutual fund manager to gain a Limited Broker, Dealer and Underwriter Licence (LBDU) from Thailand’s Securities and Exchange Commission, according to a statement from the Edinburgh-based firm.
The firm received the licence in June. It enables ASI to offer offshore funds directly to domestic investors in the country.
“Although other global firms have been selling their offshore funds through feeder funds via domestic banks and local asset managers which have [this] licence, ASI is the first foreign asset manager to obtain the LBDU,” a spokeswoman told FSA.
Thai investors can now start directly subscribing to four of ASI’s global funds through its “global wealth solutions platform”, she said, adding that the firm plans to offer more products within the next few months.
Immediately available are the Luxembourg-domiciled Aberdeen Standard Sicav – China A Share Equity, Diversified Income, Frontier Markets Bond and World Smaller Companies Funds.
While the funds can be bought by retail investors, the high net worth segment will be the firm’s priority, the spokeswoman said.
ASI already distributes around 20 mutual funds covering foreign equities, fixed income and mixed assets to Thai onshore investors through feeder funds.
In response to regulatory relaxations in Thailand’s capital markets in recent years, local investors have moved beyond domestic assets through feeder funds distributed by local asset management firms and regional banks.
Net assets of the country’s mutual funds totaled THB 4.8trn ($152bn) at the end of June, surging 6.3% in the second quarter compared with the first three months of the year, according to a recent Morningstar report.
The popularity of money market funds and the recovery in domestic and global equity markets were the main reasons for the increase – although they were insufficient to recoup this year’s full decline, with net assets being 10.3% lower than at the end of 2019.
Demand for foreign funds
Notably, domestic investors preferred foreign investments to Thai funds, said Chayanee Juengmanon, Morningstar’s senior manager research analyst based in Bangkok, and author of the report.
The net asset value of foreign investment funds (FIF), excluding fixed-term products, increased 13.6% from the previous quarter to THB 627bn, with all of the five largest FIF categories enjoying positive net asset growth.
However, ASI believes direct sales of foreign funds are more cost-effective for investors who will be subject to a single fee structure, and who will also have access to the firm’s global investment teams, according to the spokeswoman.
ASI has been present in Thailand since 2001 and currently has a full-service office with a 60-strong team including domestic investment and structuring capabilities across equities and fixed income.
“Our existing sales team in Thailand will be responsible for distribution of the new and broader set of international funds to local investors. These funds are managed offshore by our investment teams in Asia, the US, UK and EMEA, [although] as our business evolves we will adjust our resources accordingly,” said the spokeswoman.
The firm, which manages $562.9bn of assets globally (as at 30 June 2020), also expects to attract interest in its ESG capability.
“Thai investors’ awareness of ESG has been increasing and the pandemic is set to drive demand for more sustainable investments. As responsible investors, ESG factors have been an integral part of our investment decision-making process,” said Robert Penaloza, ASI’s head of Thailand, in a statement.
