BNPP AM aims for new client segment in Malaysia

Industry Interviews

The firm is in discussions with a local asset manager to white-label its products for retail and wholesale clients.

Angelia Chin-Sharpe, BNP Paribas Asset Management

BNP Paribas AM has been in Malaysia in 2007, but it is after 10 years that it has decided to target the country’s retail and high net worth segments, according to Angelia Chin-Sharpe, Kuala Lumpur-based CEO.

The firm’s Malaysia investor base has been institutional, she said.

It is one of five foreign asset managers in the country that are allowed to manage institutional money, according to Evonne Gan, Singapore-based analyst at Cerulli Associates. The other four managers are Nomura Asset Management, Amundi, Aberdeen Standard Investments and Franklin Templeton, Gan added.

Chin-Sharpe said that her firm has added a dedicated staff for distribution sales and marketing, which will support efforts to branch out from institutional sales.

“We think now is the time to actually come into the [wholesale and retail] distribution space,” Chin-Sharpe told FSA during a recent visit in Hong Kong. She declined, however, to disclose how much institutional money the firm manages.

Feeder route

The firm plans to partner with local fund managers to help with distribution, according to Chin-Sharpe. The products will be white-labelled in the form of feeder funds or through sub-advisory.

In terms of products, the focus is on global sukuk funds and Asean and global equity offerings. Six investment team members are based in the local office, she added.

Partnering with private bank and retail distributors directly may be difficult if a firm does not have enough resources. In Malaysia, the firm only has 15 people, around half of which are focused on marketing and sales, according to Chin-Sharpe.

“Malaysia is not like an island like Hong Kong or Singapore. It has 13 states. It has hundreds of bank branches and I do not have the machinery to service all of them.”

Working with a local asset manager is preferable, she said, because it has established partnerships with banks as well as financial advisors. In addition, a local manager typically has ample personnel to help with sales, Chin-Sharpe added.

Last November, Schroders made a similar move by setting up a strategic partnership with Maybank Asset Management.

According to Cerulli, the feeder fund strategy is the most viable channel for foreign asset managers in Malaysia.

The other route for foreign firms is through locally-domiciled funds. Eastspring Investments, Franklin Templeton, Manulife Asset Management and UOB Asset Management have used this strategy, according to data from Malaysia’s Securities Commission.

However, only Eastspring and Manulife have gained more than 1% market share of the country’s mutual fund industry, according to Morningstar Direct.

Top 10 managers in Malaysia by AUM ($bn)

Name

As of March 2019

Market share%
Public Mutual Berhad

73

47.85

CIMB Principal Asset Management Berhad

23

15.05

Affin Hwang Asset Management Berhad

16

10.39

RHB Asset Management Sdn Bhd

8

5.42

Eastspring Investments Berhad

5

3.29

Manulife Asset Mangt Services Berhad

5

3.11

Kenanga Investors Berhad

4

2.83

Maybank Asset Management Sdn Bhd

3

2.23

AmFunds Management Berhad

3

1.79

Hong Leong Asset Mngt Bhd

2

1.11

Source: Morningstar Direct

Local and foreign

Local asset managers managing local assets tend to outperform their benchmarks, according to Tan Kian Hong, Singapore-based senior analyst at Cerulli. However, they rely on foreign asset managers for offshore investment expertise and tend to seek tie ups with foreign managers to launch feeder funds, Tan added.

“That’s why there are now a lot of global funds partnering with local fund houses to have them distributed in Malaysia, so that local investors can have access to global assets.”

In terms of Malaysia fund flows, Asia-Pacific (ex-Japan) equity funds had the highest net inflows during the one-year period ending March, followed by domestic shariah bonds, global equity and Greater China funds, according to Morningstar Direct.

 

Top 10 asset classes by net inflows ($m)

Name

March 2018-March 2019

Equity – Asia Pacific ex-Japan

1,535

Equity – Asia Pacific ex-Japan (Sharia)

1,417

Bonds – Malaysia (Sharia)

1,020

Equity – Global

923

Equity – Greater China

838

Source: Morningstar Direct

 

 

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