Posted inNewsSoutheast Asia

Philippine fund firm triples client base

Separately, a relaxation of regulations by the country’s securities regulator has prompted investment companies to launch feeder funds.
Makati Skyline, Metro Manila - Philippines

Manila-based BPI Investment Management will be acquiring the mutual funds managed by Philam Asset Management, according to a statement from Bank of the Philippine Islands (BPI).

With the acquisition, BPI IM’s assets under management will increase to nearly PHP 165bn ($3.24bn) and will double its product offerings to 18. BPI IM’s client base will also triple to 140,000 investors from 50,000, according to the statement.

BPI IM is a wholly-owned investment company subsidiary of BPI, which is one of the largest banks in the country that is listed on the Philippine Stock Exchange.

Philam AM  is wholly-owned by insurer Philam Life, which is a member company of the AIA Group. The transfer of funds comes after Philam’s decision to transition into a trust company, according to an advisory alert on its website.

The handover of funds will be completed by 20 December, the statement said. BPI IM will be assuming the management and distribution, but it is unclear whether Philam AM’s fund managers will also be moving over.

“The assignment of Philam AM’s contracts to BPI IM would allow us to expand our product offerings as well as tap clients outside the BPI universe,” Martin Enrile,” BPI IM’s president, said in the statement.

FSA sought more information from both firms, but they were not able to provide additional details in time for publication.

BPI IM is already one of the largest asset managers in the Philippines, managing around PHP 100bn on its ALFM-branded fund range, which accounts for 39% of the mutual fund AUM managed by investment companies regulated by the Securities and Exchange Commission (SEC).

In the Philippines, mutual fund products are regulated by different regulators, which results in different terminology.

Banks and their trust departments and stand-alone trusts manage unit investment trust funds (UITFs) and are regulated by the central bank, the Bangko Sentral ng Pilipinas (BSP), while investment companies manage mutual funds and are regulated by the Securities and Exchange Commission (SEC).

Besides its investment company subsidiary, BPI also has a trust entity, BPI Asset Management and Trust, which manages around 19 UITFs, according to data from the Trust Officers Association of the Philippines (TOAP).

There are around 225 UITFs in the country, while the number of mutual funds managed by investment companies is around 66, according to data from TOAP and the Philippine Investment Funds Association (PIFA).

Gradually opening up

 Separately, BPI IM is also one of the first investment companies to launch a feeder fund, according to data from PIFA.

It was only last year when the SEC allowed investment companies to launch feeder funds, according to the regulator’s revised rules and regulations.

In August, BPI IM launched the ALFM Global Multi-Asset Income Fund, PIFA data shows. However, no details about the product can be found on the firm’s website.

It is understood that the product is not yet for mass distribution and is, for now, exclusively distributed by a third-party securities firm.

Another investment company that has launched feeder funds this year is Sun Life Asset Management, according to a Cerulli Associates report.

The other regulator — the central bank — allowed UITF feeder fund products to be launched in 2013. In total, the number of  feeder funds has grown to 52 this year from around 16 in 2017.

Part of the Mark Allen Group.