Kirk West, Principal Global Investors
“We would like to have a physical presence in Korea and Taiwan,” Kirk West, Principal Global Investors’ head of international offices and CEO for Asia,” said during a roundtable discussion in Hong Kong yesterday. “We already have significant client relationships in both countries.”
West did not give any timeline, however, but said it depends on “finding the right time and the right partner”. Also undecided is whether it would set up a fully-owned subsidiary or form a joint venture.
West believes his firm has been successful with regional joint ventures. They include CCB Principal Asset Management in China and CIMB-Principal Asset Management, which has operations in Malaysia, Singapore, Thailand and Indonesia.
In both Korea and Taiwan, the firm manages asset classes such as real estate on behalf of institutional investors, according to West. In Korea, the firm has a discretionary investment management licence, he said.
“If you want to go to the high net worth and retail markets, you really need the resources to be able to support that on the ground,” he said.
Taiwan has been a hot spot lately for foreign managers. This week, Pimco announced it would set up an onshore office. However, Taiwan has not been the best fit for all asset managers. Columbia Threadneedle and Value Partners have both pulled out.
Increase China stake
The firm also aims to increase its stake in CCB Principal Asset Management in China, according to Thomas Cheong, Principal Financial’s Hong Kong-based president of North Asia.
Thomas Cheong, Principal Financial
“As a group, we are always on the lookout for opportunities to increase stakes in businesses that are doing well. We’ve done that with CIMB-Principal, and if the opportunity arises in China, we want to do the same,” Cheong said.
This year, Principal Financial acquired an additional 20% stake in CIMB-Principal Asset Management and 10% stake in CIMB-Principal Islamic Asset Management from Kuala Lumpur-based CIMB. The acquisition increased Principal’s shareholding of both firms to 60%.
However, much depends on whether partners in the China joint venture would agree to give up some of their stake so Principal could own more.
China Construction Bank owns 65% of the joint venture, while Principal owns 25%. The remainder is owned by investment firm China Huadian Capital Holdings.
“The question is when. Whether that window of opportunity opens is something that we are continuously discussing with our partners,” Cheong said.
CCB Principal manages $150bn in pension and mutual fund assets in China. Its mutual fund business has RMB 500bn ($73bn) in assets, according to Cheong. The joint venture alone accounts for 22% of the group’s global AUM of $667bn.