Your humble Spy is suffering the after-effects of Thanksgiving this morning. Yes, that great all-American holiday, which the rest of the world ignores, has passed for another year. Turkey, cranberry sauce and more beer and wine than a rugby team consumes on away trip, has left Spy in need of a holiday. And what does Spy have to be grateful for this year? Well, Asia, to be fair. Spy is grateful that Asia continues to grow at a healthy pace. Spy is grateful the asset management industry continues to thrive in the region despite its occasional wobbles. Spy is grateful that slowly, but surely, policy makers in Asia see funds as a worthy way to manage savings. And are enacting legislation accordingly. And, above all, that Asia has not blindly embraced the dullness of ETFs and remains enthusiastic about active management. This may not have been the easiest year thus far, however Spy remains confident that Asia’s best days still lie ahead.
As 2018 starts to draw to a close, Spy has come across a number of people putting their feet under different desks. As sure as two economists will have six different outlooks for the economy between them, Spy can guarantee people will be moving around our industry.
News has reached Spy that Glen Lee, who has been managing intermediary distribution at UBS Asset Management in Singapore for nearly seven years, has stepped down. Glen is staying in the industry and will surface at another asset management firm in the Lion City in January. Spy has no news on who is replacing Glen at the Swiss giant. UBS’s stand out fund has been the US Total Yield strategy, up more than 4% over the last year, rather impressive considering the turmoil in markets.
Nordea Asset Management has had a change in its distribution team. Grace Yeo has stepped down from the European manager and has been replaced by Joey Yap. Grace began at Nordea in a supporting role and in the last few years has been focusing on institutional client engagement. Spy understands that Grace is staying in the industry and will join a new firm shortly. Nordea has a reputation for active ESG engagement and is a passionate promoter of cleaner industrial practises. Nordea’s Low Duration High Yield Bond fund has returned more than 5% in the last year.
Prudential, the insurance giant, has pinched from within the wider group. Spy understands that Hui Jian Koh has moved from Pru’s asset management arm, Eastspring, to head up the product team at the insurer. Hui Jian was formerly looking after intermediary distribution for Eastspring. Eastspring’s stand out fund over the last three years has been its Global Emerging Market strategy, delivering nearly 29%. Although, in line with most peers, the last year has been a negative one.
Spy has discovered that Edith Tse, who had been the managing director of Ptarmigan, a specialist financial media agency in Hong Kong, has resurfaced at Chord Asia. Edith is now head of social at the agency. Chord works with a number of local and global asset managers, particularly helping them develop strategies for the China market. As many international asset managers discover when coming to Asia, talking points with China consumers are often very different to those in the West.
Can there been anyone in the industry who is feeling more vindicated than Jamie Dimon on the subject of Bitcoin. The iconic leader of the US bank took a lot of flak last year as he poured cold water on the crypto-currency craze, especially Bitcoin, just before it had a blow off to nearly $20,000. Now that cryptos have come crashing down to earth and languish rather unloved and even less talked about, the veteran banker looks rather prescient. There is an old anti-establishment joke much beloved by cheesy t-shirt makers: “Don’t steal, the government hates competition.” Spy has always felt that crypto’s most overt claim that it is deliberately outside the system was always its fatal flaw. In this instance, it is a case of “Don’t fight central banks, they don’t like competition much either”.
Spy’s colleagues have been in Manila this week speaking to the fund selector community at banks and insurance companies at our annual FSA Manila Forum. In line with all FSA events, the team conducts polls of the audience. The polling threw up a few interesting views. Nearly half of attendees were outright bearish on the Chinese economy and yet, in an apparent contradiction, 80% of the guests thought Asia would deliver the best world growth in 2019. The most surprising thing of all was that 60% of the people in the room felt ESG was beginning to matter to clients when investing.
It is no secret that 2018 has turned out to be a bit of a lemon year for asset managers and wealth managers alike. The phrase Spy has heard most frequently in the last few months is that “there has been nowhere to hide”. Strategies that had delivered have soured and the industries have been relatively short of ideas. Bankers of late, by all accounts, have been rather reticent to pick up the phone and discuss the outlook for 2019, especially with such a lack of conviction. Looking back at 2018 global outlooks published by wealth managers at the end of 2017, few predicted the extent of the volatility in the year ahead. Spy will be watching with interest to see what industry crystal balls say for 2019.
One firm wearing its colours on its sleeve is PIMCO. Spy’s colleagues came across this little advert on Google, which pretty much says it all:
Spy has noticed that asset manager advertising has become increasingly generic or brand-orientated as the year passed. Gone are the specific strategy adverts and increasingly it is company names and slogans. That is not much of a surprise given current conditions.
In Central Hong Kong, T. Rowe Price has taken up residence at one of the tram stops:
Until next week…
