Your humble Spy has been in Europe this week away from the hullabaloo of Asia. Meanwhile, colleagues of his have been in Manila doing Spy’s drinking for him. Local fund selectors in Manila gave the overwhelming impression that inch-by-inch the Philippines is following Thailand’s feeder fund model for offshore funds. Over several glasses of Don Papa Rum with some influential locals, one of Spy’s colleagues asked the simple question: “Why is opening up the market taking so long?” “Oh, that is simple”, answered the head of fund selection at a very large bank, “The SEC is a total dinosaur.” Dinosaur or not, Spy is still waiting for his bottle of Don Papa promised by the FSA team…
China AMC, one of China’s largest asset managers, has hired a new business development team member in Hong Kong, notes Spy. Hannah Xu, who was previously vice president at CCB Frontier Capital, has joined the firm with the title of senior business development manager. Established in 1998, China AMC was the first Chinese firm to launch a domestic ETF. ChinaAMC’s CSI 300 Index ETF RMB is up 20% this year, presumably, in line with the index.
An enthusiastic reader of Fund Selector Asia sent Spy a picture of a giant Citibank advert from Bangkok this week. This enormous advert, just off Sukhumvit MRT station (where Citi’s office is) and overlooked by the Asok BTS, is pushing Citibank’s offshore fund capability. Apparently, investing offshore one can have a whale of a time. Spy’s ebullient correspondent did point out one thing: whilst the advert listed numerous asset managers available in their offshore range, one would need Superman’s eyesight to actually read the logos. Spy, admittedly familiar with asset management logos, was able to decipher the lot – but he is sincerely doubtful a single passer-by could. For the record, Citibank is promoting: AB, Allianz GI, BlackRock, Fidelity International, Franklin Templeton, Invesco, JP Morgan AM, Legg Mason, PIMCO, Schroders and UBS. Thailand feels more mainstream than ever:
After a pretty dreadful year in which the stock market punished Aberdeen Standard shareholders, investors must be rather relieved to see that the firm’s shares have bounced 29% this year. The doom and gloom of 2018 seems to be passing as the merger finally beds down. Legg Mason’s shareholders are even more excited about that firm’s prospects, observes Spy, as the asset manager has rallied a whopping 41.5%. All very impressive until one considers Amundi’s year. The French giant, and Europe’s largest manager, is up 48% in the last year. These are returns their own fund managers can but dream of. As usual, what Spy sees in these is the old adage, “the death of asset management has been greatly exaggerated” despite fee pressure, cost cuts, ETFs and distribution challenges.
So, Investec Asset Management has finally announced its new name, records Spy. The firm, which is undergoing a demerger from its parent company (sound familiar, Merian, M&G and First State?) and will be listed in London next year, has chosen the name Ninety One. This acknowledges the year the business was founded – i.e. 1991. Investec AM has been a stunning success story. From start up, with exclusively South African mandates, to a global $143bn in AUM in just 28 years, is very impressive. Investec has recently hired John Cappetta to bulk out its Asia private banking distribution.
The GIC has recently published a report on the Bridge Forum held earlier this year. Some of the great and good from California were invited to have a chat. Reid Hoffman the founder of Linked In waxes lyrical about something he calls ‘Blitzscaling’ or, in normal language, rapid growth by start-up companies. He argues that, “It is the willingness to embrace the irrational – to go against common sense and follow principles that are deeply counter-intuitive – that makes blitzscaling so unique.” Well, Hoff, Spy knows you made billions selling Linked In to Microsoft, but what do you say to We Work, Lyft and Uber investors who have found that common sense, in the end, does actually prevail most of the time. It has been reported, by the way, that Travis Kalanick, Uber’s founder, has sold $1.5bn of stock in the last week, displaying uncanny common sense thinks Spy…
Spy shares the frustration of the industry that Compliance (yes, it gets a capital C) often acts like a bunch of, as one recent portfolio manager put it, ‘hardened fascists’. When presenting to a fully professional, all bank, licensed audience, Compliance will, nonetheless, often veto the mildest enthusiasm in a deck. It was therefore with eye-rolling depression Spy saw this particular advert:
Lock ‘em up and throw away the key, says Spy. With a wry smile, Spy saw Macy’s in the background, another business that is not making money. This week it issued its third profit warning this year.
The always excellent Webb-Site Reports is looking even more heroic than usual this week having rightly called HK counter ArtGo a bubble in September and warning investors to avoid it. The stock lost almost all its value this week. Webb’s key insight is this one: MSCI were going to include this dubious stock in their index, guaranteeing ETF investors exposure to this dog. Although MSCI changed its mind at the last minute, Spy remains convinced that with this sort of mindless indexing, Asian bond and equity markets continue to favour active managers handsomely.
Spy’s photographers have been out and about and there is advertising returning to Hong Kong. First up, a new BNY Mellon campaign highlights its numerous boutiques in Central. Spy graciously explained the seemingly odd tagline to fellow bar patrons (even though he wasn’t asked to):
A tram has been spotted with Axa IM branding promoting their vision of the future in slick aqua colours:
Finally, Allianz GI has a new consumer campaign in Singapore promoting its thematics funds:
Until next week…
