Natixis IM swaps out Taiwan master agent

In Taiwan, the main way that foreign asset managers can distribute their offshore funds to the domestic market is through a local master agent, which uses its own set of distributors to market the funds for a commission.

Natixis IM has ended the master agent arrangement with Taiwan’s Fubon for about 13 years (Fubon SICE from 2007-2012 and Fubon AM from 2012-March 2018) and has instead chosen CTBC Investments.

FSA sought more information about the reason for the change from Fubon AM, but the firm declined to comment. Natixis was also contacted but did not respond in time for publication.

In a joint statement, Thomas Chen, CTBC Investments’ chairman, only said that the partnership will enable Natixis IM to “provide more diversified investment solutions” to Taiwanese investors.

CTBC Investments has 30 products registered in Taiwan, which include global, Asia-Pacific, emerging markets and Taiwan equities and fixed income funds, according to data from Taiwan’s Securities Investment Trust and Consulting Association (Sitca).

With the exception of its money market fund, CTBC Investments’ largest fund is the CTBC 6-Year Maturity Emerging Market Sovereign Bond Fund – USD, which has NT$4.6bn ($160m) in assets, Sitca data shows.

For the full year 2017, CTBC Investments was Taiwan’s third largest firm in terms of net new inflows, which amounted to $313.3m, according to data from Cerulli Associates. At the end of 2017, it managed $1.40bn in assets.

Natixis IM has 12 funds registered in Taiwan (chart below) from three of its affiliates: Loomis Sayles, Harris Associates and Natixis Asset Management, which will be renamed as Ostrum Asset Management on 3 April, according to the statement.

These funds include US and global fixed income funds, as well as regional Asia-Pacific, European and Latin America equity funds, according to a Natixis IM spokesman.

Natixis has big ambitions for its Asia-Pacific operations, with expectations of doubling AUM in the region by 2020, Fabrice Chemouny, Natixis IM’s head of Asia-Pacific, said in a previous interview.

As of the end of January, the firm managed around $60bn of assets sourced from Asia-Pacific clients, according to the statement. Globally, the firm manages $997.8bn in assets.

Taiwan market

In Taiwan, offshore funds have become popular, with cumulative assets larger than locally-manufactured products. There were 989 offshore funds with assets of around NT$3.45trn as of the end of February, which compares to the 810 onshore mutual funds with assets of around NT$2.52trn, according to Sitca data.

As in most of Asia, in Taiwan banks dominate fund distribution. However, managers are starting to see growth in other alternative platforms, according to a report from Cerrulli Associates.

One of these platforms is the industry-backed fund supermarket Fund Rich, which quadrupled its assets and tripled its client base within a year of operation. As of the beginning of March, currently it has net assets of $430m and its retail investor retention rate hit an average of 81%, the research firm said.

Natixis IM’s funds registered in Taiwan

Source: Natixis Investment Managers