Spy was enjoying a robust red from the Yarra Valley’s Balgownie Estate last night, and contemplating the first third of the year which ends tomorrow. Covid is beating a hasty retreat (except in India), tech companies are making record profits (again) and Asian wealth managers continue to gather assets at a record pace. The one big problem? Microchips – or a shortage of them. Of all of the world’s shortages, Spy, and it seems almost everyone else, had no idea that it would not be vaccine scarcities that would pose one of the largest threats to companies’ profits in 2021, but humble silicon instead. Even the mighty Apple is beginning to feel the pinch. Spy does not remember a single 2021 Outlook that explicitly reminded investors to worry about chips. A reminder, if needed, it is always the black swans that are sent to try us.
News reaches Spy that UOB has a key change in its wealth and asset management division. Aaron Tay, who was senior director, in charge of forming business partnerships with external asset managers, has stepped down after a little more than two years in the role. Tay has taken the CIO role at Auspac Investment Management, a venture capital business focusing on early-stage companies in the technology, healthcare and consumer segments of the market. He remains based in Singapore, but Spy has no news on who has replaced him at UOB.
In a farewell closer to home, FSA’s very own editor, Francis Acosta, is moving to Value Partners. Francis is a taking up a role in the Hong Kong-headquartered asset manager to help with in-house content production and support for the firm’s communications. Rupert Walker, who has been regional editor for Last Word, based in Hong Kong, is taking over as editor of Fund Selector Asia. Spy takes this chance to wish Francis all the best in his new role and extends hearty congratulations to Rupert.
Spy is spotting a pattern in asset management results in Q1: net outflows, but rising AUM. This week it was French giant, Amundi’s turn to share that news. The firm suffered net outflows of €12.7bn ($15.4bn) largely in treasury-related products but AuM rose to €1,755bn, up 1.5% for the quarter, while net income jumped 50% on a year ago. Amundi is in the process of buying SocGen’s Lyxor ETF business which it is expecting to complete by February 2022 at the latest.
JVs in China? That is so last decade. The trend of buying out JV partners accelerated this week as Morgan Stanley became the most recent foreign firm to announce steps to control its China business. China Fortune Securities is selling its 36% stake in Morgan Stanley Huaxin Fund Management Company (MSHMC) with Morgan Stanley the proposed buyer. Assuming the sale is approved by regulators, Morgan Stanley will own 85% of MSHMC. The final 15% stake in the firm is held by CoStone Capital and it is also expected that Morgan Stanley will pick up that minority stake, too. This will give Morgan Stanley 100% control. And so it goes.
Aberdeen Standard has been receiving a large amount of flack this week in the broader media over its rebrand to the vowel-less Abrdn. Spy offers Abrdn some words of comfort, for what they are worth. To shamelessly quote Oscar Wilde, “What is worse than being talked about? Not being talked about!” The change has garnered passionate responses which shows people really care about the brand and the business. Change is always uncomfortable and few people love a change under any circumstances. A brand is what you are and so much more than a name. Abrdn’s best revenge, ponders Spy? A string of great fund performances and Spy suspects most people will forgive a missing vowel or two. Spy can’t help but think Apple Computer must have sounded pretty darn silly in the 1970s…
VanEck Asset Management is well known for its commodity ETFs, especially GDX, the global miners fund. This month VanEck added a more modern form of mining to its stable: VanEck’s Digital Assets ETF launched this month and its holdings include a broad range of digital ecosystems operators and companies, such as digital asset mining, hardware, exchanges, holding and trading, payment gateways, patents and services, and banking. The fund is not cheap by ETF standards, with an annual fee of 0.65%. VanEck has an office in Singapore supporting the Asia region.
Spy was looking at asset manager share price performance this morning and the staggering outperformance of Blackrock was abundantly clear. The firm’s market cap has reached $127bn as the shares trade near their all-time high. Blackrock’s market cap is greater than T Rowe Price, Ameriprise (Columbia Threadneedle), Invesco, Amundi and Schroders combined. Of those firms, however, the best bounce back in the last 12 months is Invesco. Their shares were down at a miserable $6.38 last May and have since rallied 430% to $27.68 closing at a one year high.
Reading the comment by DBS CEO, Piyush Gupta, on the Singaporean bank’s stellar $2bn+ quarter, Spy was struck by the analogy he used. Gupta said: “This has been an extraordinary quarter for our business as we fired on all cylinders.” We are in the death throes of the internal combustion engine, yet a century of motoring metaphors is hard to kill. “We are humming on our lithium battery”, does not have quite the same dynamic ring to it, does it? DBS never broke out wealth management specifically in its quarterly update, but one can only assume that that cylinder was firing healthily, too.
Spy’s quote of the week comes from Nobel economics laureate, professor Eugene Fama, of the Efficient Market Hypothesis. “Money is like soap, the more you handle it, the less you will have,” he said. Or as Spy’s doctor granny used to say, “Don’t fiddle darling.”
Spy’s photographers have no new outdoor advertising this week, but online in Singapore’s consumer business media a new campaign by Axa Investment Management is under way. The firm is focusing on bonds.
Until next week…
