Paris-based Ostrum Asset Management has set up a Hong Kong subsidiary to expand its real assets private debt management platform in Asia-Pacific, according to the firm’s executives, speaking at a media briefing yesterday.
The firm has hired Charles Regan as managing director and head of Asia-Pacific infrastructure and Alistair Ho for the role of managing director and head of co-lending for Asia-Pacific.
Before Ostrum, Regan was the co-founder of Hong Kong-based infrastructure debt firm Winward Capital Asia, while Ho was previously head of structured finance for Asia ex-Japan at Mizuho Securities.
Other recent hires within the infrastructure debt team in Hong Kong include Angus Davidson and Evelyn Chan. All hires have at least been with the firm for a month, according to Regan.
Ostrum has had a Singapore office since 2015.
With the new team in Hong Kong, the firm expects to launch an Asia-focused infrastructure debt strategy by the end of 2019, hoping to raise at least $500m from global investors, according to Regan.
Globally, the private debt team has 13 professionals managing around €1.2bn ($1.35bn) in assets, according to Ibrahima Kobar, the firm’s Paris-based deputy CEO and global CIO.
Ibrahima Kobar, Ostrum Asset Management
“By the end of 2020, we are targeting the [private debt] platform’s AUM to be €6bn,” Kobar said during the briefing, noting that the firm hopes to expand the client base outside of Europe to include Asia.
A number of firms have been building alternatives capabilities.
Hong Kong-based Value Partners is also developing its alternatives offerings and has several products in the pipeline, which include an Asian-focused private debt fund, a real estate fund and a private equity fund that will focus on private vocational schools in China.
Last year, Franklin Templeton entered a joint venture with Hong Kong-based Asia Alternatives to provide investors with global private equity fund-of-fund products.
In Malaysia, Affin Hwang Asset Management launched a private equity business, Bintang Capital Partners. The establishment of the business is the formalisation of the asset management firm’s foray into the private equity market, which began in June 2017.
Alternative investments have become a key asset class among Asia’s wealthy, particularly for family offices in the region. In Asia, around 41% of family offices’ assets are invested in alternatives, according to UBS and Campden Wealth’s global family office report.
Family offices’ asset allocation
Source: UBS and Campden Wealth
Fixed income hire
Besides alternatives, Ostrum AM also plans to expand its fixed income team to include staff in Hong Kong or Singapore, according to Lientu Lieu, Paris-based head of business strategy.
Lieu expects that the hire will be made by the third quarter.
Lientu Lieu, Ostrum Asset Management
Plans to hire an Asia-based fixed income portfolio manager last year were put on hold because alternatives took priority, according to Kobar.
“We first set up the alternatives team because the demand is there, that’s why we postponed a little bit for the fixed income side.
“[The fixed income hire] is going to be opportunistic. We are still discussing with clients which solutions would benefit them,” Lieu said.
The firm already has three credit analysts in Singapore – one of whom was first relocated from Paris in 2015 and the two others hired in mid-2016. It also has an equity team in the Lion City established four years ago.
Client segment expansion
Ostrum’s business is largely institutional, with around 95% of its €257.6bn AUM sourced from institutions.
Last year, however, the firm decided to target the wholesale market in Asia and globally.
“We have made inroads on that initiative. Around 50% of our inflows last year came from the wholesale side and half of that came from clients outside of France,” Lieu said, but did not give exact figures.