Old Mutual Global Investors plans to bring more new products to Asia, having recently hired an Asian equities team and a product developer. Carol Wong talks to Stefanie Eschenbacher about building a presence in Asia, promoting a brand in a competitive market and the opportunities presented by Asian fund passports.
Old Mutual Global Investors is a newcomer to Asia and enters as the market is going through unprecedented changes.
Shanghai-Hong Kong Stock Connect has just launched, linking the stock markets of Shanghai and Hong Kong. It also paves the way for the much-anticipated mutual fund recognition between Hong Kong and China, and the potential inclusion of Chinese A-shares in emerging market indices.
With China gradually opening up its capital account, asset managers from all over the world have flocked to Hong Kong to take advantage of the opportunities.
Carol Wong joined the asset manager just over a year ago as managing director and head of distribution for Asia, having spent 15 years with BNP Paribas Investment Partners.
Wong and her team are initially targeting high-net-worth individuals and have established relationships with 15 global private banks.
“When our brand is more recognised, we will also target retail channels as well as insurance companies for our fund distribution,” she adds.
Old Mutual Global Investors has relatively few funds in Asia, but with the recent hire of Joshua Crabb from BlackRock as head of Asian equities, along with two of his team members, this may change. Wong says some of the mandates that were previously outsourced are now being managed inhouse, which will also help her to promote the offering in the region.
The Old Mutual Asian Equity Fund will be registered in Hong Kong and Singapore now that Crabb has taken up his role.
“In the past, we did not really push for them in Hong Kong and Singapore, but now we have our own fund managers on board,” she says. “It is easier for us to sell our inhouse products.”
There are also plans to bring the recently launched Old Mutual Monthly Income High Yield Bond Fund and the European Smaller Companies Fund to Asia.
“We will develop more new funds tailored for Asian needs, and one of the examples of our commitment in this area is that last month we have hired a senior product developer in Hong Kong,” she says, adding that he will mainly focus on initiating and developing products dedicated to Asia. Wong says her team is thoroughly accessing the Shanghai-Hong Kong Stock Connect, and exploring the opportunities this could present. The pilot programme links the stock markets of Shanghai and Hong Kong, which means eligible investors can trade and settle eligible shares listed on the other market via the exchange and clearing house in their home market. “It will increase flexibility for our Asia and China fund managers in terms of the choice of stocks they can buy,” she says. Her team is also looking at the possibility of getting a quota to invest in Chinese A-shares.
Once the stock connect programme is up and running, the much-anticipated mutual fund recognition scheme between Hong Kong and China that allows asset managers to put their Hong Kong-domiciled funds on a fast track for distribution in China should also launch.
“We may not be in the first batch of asset managers to offer funds under the mutual fund recognition scheme,” Wong says, but adds that it would present a compelling opportunity in the future.
The latest filings with the regulator suggest that only funds domiciled in Hong Kong will be eligible to participate in the mutual fund recognition scheme, and fund managers will also have to be domiciled locally.
“We will closely monitor the opportunity,” she says. “We have fund managers sitting in Hong Kong … and the next step is whether we will register funds in Hong Kong.”
So far, the funds her team sells into Asia are domiciled in Dublin. Wong says her main objective now is to formulate a broader strategy for Asia, build a presence in the core markets and broaden the product offering for the coming years.
“Naturally, our target are private banks because they will appreciate more the professionalism as well as the unique offering and good performance of our funds rather than retail first,” she says. “Retail investors will want brand recognition, and we are not there yet.” The asset manager rebranded as Old Mutual Global Investors only two years ago and previously operated under the Skandia brand in Asia.
It started sponsoring professional events targeting private banks, which is currently are the main target channels. In Taiwan, it branded taxis; in Hong Kong, it branded some of the trams running on Hong Kong island. The Old Mutual Group comprises not only asset management but also investment, savings, life assurance, banking, property and casuality insurance, operating in Africa, Europe, the Americas and Asia.
It was founded in 1845, and has expanded from its origins in South Africa through organic growth and strategic acquisitions. It is listed in London and in Johannesburg.
©2014 funds global asia