Growing risk in home markets and loosening restrictions on overseas investment and foreign ownership across the region are also driving the trend of feeder funds, which do all their investments through a master fund.
In September, Amundi Asset Management announced its entry into the Malaysian market with the launch of two wholesale feeder funds. That followed other launches of feeder funds by AmInvest, RHB Asset Management, Maybank Asset Management and Franklin Templeton Asset Management earlier in the year.
In July, Cerulli noted that in Thailand and Malaysia offshore investing is increasing. As investors in the region progressively become more sophisticated, many have started looking beyond local shores for higher-yielding investments.
“A silver lining in the recent uncertainties in Thailand and Malaysia might seem counter-intuitive at first, but as emotions calm, the events in those countries might serve fund managers well in educating investors on the need to diversify beyond their local currencies and home ground,” says Shu Mei Chua, an associate director at Cerulli.
The master-feeder arrangement is likely to remain the most-preferred route for global managers to access retail assets in Southeast Asia, as it can isolate foreign managers from the risks of keeping an onshore presence and circumvent cumbersome distribution issues related to the ASEAN CIS [fund passporting] scheme, said Yoon Ng, Cerulli’s Asia research director.
