The FSA Spy market buzz – 16 November 2018

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Fidelity hires, so does Barings; EBSHK loses; fintech in Singapore; Industry profits; thoughts on Indonesia; Van Eck comes to town; FSM One sales; UOB funds in Thailand; Philippine land grab; trams and much more.

The FSA Spy market buzz - 06 April 2018

Spy found himself in the traffic-clogged metropolis of Jakarta this week. The drum beat of noise about Indonesia changing its regulations to allow offshore managers some access is getting louder. Spy was off to hear voices on the ground, rather than idle beer-fuelled speculation so common on the streets of Hong Kong and Singapore. Spy can report that hope does indeed seem to be rising that something may occur before the elections on April 17th next year. However, before the champagne corks pop, Spy hastens to add that those wishing for an easy ride in Indonesia’s alluring market should bear in mind that Indonesia has never taken a directly conventional path to legislating financial liberalisation or participant oversight. JP Morgan was banned from dealing in Indonesian sovereign bonds for a year after an analyst wrote a mildly critical report. Spy wonders, hypothetically, how well a major name, running a large emerging markets fund, that went negative on Indonesia would be treated locally…Food for thought whilst one enjoys a cold Bintang beer and nasi rawon. Still, that has not put off asset managers going onshore in Indonesia. Spy almost bumped into Andrew Milligan, Aberdeen Standard’s global head of strategy, who was also enduring the traffic to share ideas on 2019.

News reaches spy that Hon Wah Choi has joined Fidelity International in Hong Kong. He has taken the role of head of relationship management. Hon Wah was previously the chief distribution officer of AMG Wealth Management. AMG is one the leading independent financial advisory businesses in Hong Kong. There is no news yet about who has taken Hon Wah’s old role. Fidelity’s standout fund over the last 12 months has been its Global Health Care strategy. The fund is up nearly 13%.

Spy notes that Colin To, an investment strategist at EBSHK Private, the affluent wealth arm of Everbright Sun Hung Kai in Hong Kong, is leaving the firm today. Spy understands that Colin will be staying in the industry and will shortly resurface at another wealth manager. EBSHK targets HNWIs and has its own research team. The business is ultimately controlled by listed Hong Kong group, Everbright Securities.

Barings has pinched media relations specialist Florence Chan from JP Morgan Asset Management in Hong Kong, Spy has learned. Florence has joined Barings as an associate director for APAC media relations. Florence began her career as a journalist before switching to PR agency Fleishman-Hillard and then moving into asset management. (In Spy’s experience asset managers frequently tap journalists to join their teams…although Spy is quick to note that no offer from a reputable money manager has yet been forthcoming for an alcohol-loving, brow-beaten hack of a Spy journalist rumoured to be living in Kowloon).

Are we going to be hearing more about Van Eck? Spy suspects so. The privately held US asset management firm with both active and passive strategies has recently opened an office in Singapore, expanding from its Australia base to better serve the Asian market. Corinna Tey has joined as marketing manager, while Richard Slaw is overseeing business development in Singapore. The firm has a range of commodity, bond and gold funds. Don’t bother with a “what the heck” joke – Spy is sure they have heard them all before.

Fundamental Media, the specialist asset management media agency, has pinched Rebekka Kristin from Linked In to be its new APAC managing director. Before Linked In Rebekka was with Haymarket in Hong Kong for nine years and ran their digital sales team. As the asset management industry has matured in the last decade, competition among managers has grown with the imperative to develop a strong brand greater than ever.

Singapore has been firmly placing itself at the heart of Asian fintech this past week with its Fintech Festival. It is no surprise to Spy that companies are flocking to Singapore’s pro-business shores to develop new financial technology ideas. Spy was quietly impressed, however, to see the head of the regulator MAS, Ravi Menon, giving a Ted Talk-style address to the audience dressed in jeans, channelling the late, great Steve Jobs. For people more familiar with bankers all looking suited and booted and practically clones of each other, Ravi’s dress code must have come as a welcome surprise to the assembled crowd. Menon singled out OCBC, UOB and DBS for praise. Spy, for one, welcomes any form of technology that means he has to do less with retail bank branches.

It is no secret that volatility has been through the roof in the last few months. Nothing tells Spy more about the state of the market than the fact that the best performing fund on FSM One’s platform over the last month has been a money market fund, up a lively 20%. Talking of FSM One, their best-selling, as opposed to best-performing, funds over the last month have been the Allianz Income and Growth, First State Advantage and First State Bridge. Spy is simply shocked to discover they are all income funds.

Spy has learned that UOB AM has been making a large push into Thailand. During 2018, the Singapore headquartered asset manager launched five new funds into the Thai market. The fund which has raised the most money for the business is the United Global Equity Absolute Return Fund. This is a partnership or feeder fund with Merian Global Investor’s GEAR strategy. The fund has about Baht 1.17bn in it. Spy remains convinced that Thai will be one of the best growth areas in Asia for years to come.

The next time you hear an asset management executive moaning about cost pressures and squeeze on margins, perhaps take that with a large dose of salt. McKinsey, the global consultant, released a report this week showing the rude health of American asset managers. According to the study, American asset managers pulled in $683bn of new money last year and revenues for the industry reached a whopping $188bn. McKinsey claims that profit margins are about 33% – a percentage most industries can only dream off. The report claims that globally assets under management have reached a truly staggering $88.5tn. With Asia’s wealth growing faster than any other region, there is every reason to be confident that the future for asset managers looks very bright indeed.

Is a land grab taking place in the Philippines for asset managers? Spy has encountered more asset managers taking flights to Manila in the last few months than he has heard for a long time. Spy’s own colleagues are hosting their annual Manila Forum next week, joining a growing throng. Private banks such as Lombard Odier and Credit Suisse have been marching into town with varying approaches to an onshore presence. If nothing else, it will give the jaded distribution officers a change of scene from Hong Kong, Singapore, Thailand, Taiwan and Malaysia…repeat.

One of Spy’s photographers spotted an Aberdeen Standard advert on the MRT in Singapore. Aberdeen is one of the few asset managers that seems to give the MRT any love. Taxis and billboards around Raffles Place are far more common among ASI’s peers.

 

 

Merian Global Investors has been doing an Asian tour announcing its new brand to all and sundry. In Hong Kong, a large event was hosted at the Shangri-La hotel. Spy’s colleagues who attended are easy to please. A Lego tram in Merian branding was the must-have premium of the day. Spy would not be surprised if many attendees resisted the temptation to pass on the toy tram to the kids and kept it all for themselves to play with. Beats a stress ball any day of the week.

 

 

Until next week…

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