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Video: There’s real room for industry innovation

Cooper Abbott, CEO at Matthews Asia, talks about helping clients during this period of ‘uncharted territory’ in the investment economic cycle and where there is room for innovation in the industry.

Natalie: Could you talk through some of the core focuses for Matthews Asia at the moment?

Cooper: Our goal at Matthews is to be true active partners for sophisticated investors. We express our investment approach through global emerging markets and through Asia. And it’s a very exciting time in the markets to be investing in these locations.

Natalie: On emerging markets, we’ve been in a period of hiking rates and perhaps they’ve not performed as well as some other regions recently. Where are we at now? How do you see this playing out for the next few years?

Cooper: I think risk is always vital to get right in emerging markets. They can be areas of real return potential, but you do have to mitigate and understand that they can be volatile as well. And I think to my mind, the way to look at emerging markets is both as an opportunity for returns, but also importantly for diversification. Returns have been so strong, particularly in the US market, driven by technology, but the indexes only tell part of the story. And I think our approach, which is very fundamentally oriented and very research driven, can get different results than what the benchmarks might see.

Natalie: What would you say have been more popular in terms of funds or asset classes and which have seen less inflows recently?

Cooper: We have a global client set. Our investment headquarters are really in San Francisco and Hong Kong. And so where the flow and the interest is really depends on where the client is coming from. In the US, there’s the geopolitical dynamic right now with the US and China and so we’ve seen a lot more interest in emerging markets as well as emerging markets ex-China. In UK and Europe, China is a different story and I think Asia as well as emerging markets have been an interesting area. Latin America, Middle East, very positive on Asian emerging markets, including China and then Asia, it’s also a country by country scenario.

Natalie: Therefore, on that note, where are you expanding the business in terms of perhaps funds or products and regions as well? I understand you hired someone as head of Asia recently.

Cooper: That’s right. Beonca Yip is overseeing our institutional business out of Hong Kong. We’ve recently added an individual from Dimensional Funds, Doug Burkett in the US. And we have Neil Steedman in London who has a great pedigree in emerging markets as well. Our goal is really to show up globally, like our clients, whether it’s consultants, wealth management platforms or a range of institutional clients. We can meet their needs across a range of time zones and regions. We think that’s important because the global opportunity set is compelling. We have historically had our investment teams located in Hong Kong, in Asia and emerging Asia, as well as in San Francisco. And so having that scale and scope, we think is important to get the type of coverage you need for successful investing in emerging markets.

Natalie: Are you looking to roll out the other products at the moment?

Cooper: Yes, we’re very excited about opportunities in Europe and the UK. We’re in the process of rolling out some additional SICAV offerings and we have also been very active in onboarding several segregated mandates.

Natalie: As an investment manager operating in today’s environment, what would you say are the challenges and opportunities as we look through to the years ahead? Perhaps start with the challenges first.

Cooper: In general, I think the industry does have real room for innovation. I think one of the biggest challenges facing most asset managers is relevance. What are they bringing to the table for the clients? How are they helping clients think through the real challenges they have in their portfolios, both for returns and diversification? And then I think the final element is we really are in many ways in uncharted territory. We can look at the rising rates like you’ve talked about the inflation dynamic, but also where we are in terms of investment and economic cycle and having experience to think through the scenarios from the client’s perspective is, I think, very important going forward.

Part of the Mark Allen Group.