Nick Ring, Jupiter Asset Management
Jupiter has been in Asia for five years and has focused on the Hong Kong and Singapore private bank channels, Ring said, and it works with about 35 banks in the region.
“We are looking to offer more strategies into our private bank relationships and looking to extend into Hong Kong retail.
“We do a lot of retail business elsewhere so we understand it from a sales perspective and have products that are relevant to retail investors. We have the infrastructure here [in Asia], sales and marketing, so it seems like an obvious next step.”
The firm’s broader strategy is to diversify outside the UK, which accounts for 70% of £50.2bn ($67.8bn) in full year 2017 total assets. Asia makes up only 6% or £3bn of Jupiter’s global business.
Peter Swarbreck, head of Asia-Pacific, said products in demand by Hong Kong retail investors are fixed income strategies such as unconstrained funds, European equity strategies, global equities, emerging market equity and debt funds and thematic funds.
Although plans do not include Hong Kong-domiciled funds sold through the Mutual Recognition of Funds scheme, he has high hopes for Jupiter’s retail flows in the SAR.
“In the next five years, it might be that retail is bigger than the wealth channel,” Swarbreck said.
The firm is still in the preliminary stages but Ring said the marketing budget has been substantially raised to make distribution relationships work.
“Preliminary in retail is much longer than in the private bank wealth channel. It takes a lot longer to penetrate.”
Ring said the firm moved into the German and Italian markets a few years ago and it has since extended into their respective retail markets. However, he admitted that in Asia it will be difficult because the global asset management giants have already established a presence.
“We have been in Asia for five years and we have a little bit of name awareness and actually have people here on the ground,” Ring said. “In Asia, it’s a challenge, but we’re up for that.”
The firm also intends to expand distribution channels in Thailand, where it has feeder fund arrangements with Thai asset managers, though Ring declined to name the partners.
In the feeder fund setup, Jupiter charges the local Thai asset manager the regular management fee and pays a retrocession fee, usually 50-60%, back to the asset manager. “This [becomes] their product and what they charge the client is their call,” Ring explained.
“We are keen to continue to expand those partnerships.”
Other markets for expansion are Japan, where it has a small client base and relationships with global private banks, and Taiwan, where it has a master agent partnership, Ring said.
The big missing piece in the regional expansion plan is China. The firm’s vice chairman told FSA in a previous interview that it had no concrete China strategy.
Ring said he is “watching very carefully what goes on” in China. Jupiter has had discussions about mainland distribution partnerships, but hasn’t acted on any of them. He said China is too big and the concern is spreading resources too thin.
He added, however, that forming relationships with Chinese retail banks in Hong Kong could develop into an avenue for entry into the mainland.