AsianInvestor Magazine

Issue: May 2015

Past, present and future
When AsianInvestor was launched in the year 2000 it coincided with the genesis of modern asset management in the region, forged from the fires of the Asian financial crisis. It has been our mission to report on the industry’s development ever since, and this 15th anniversary issue is dedicated both to reflecting on that journey, and forecasting where we might be in 15 years’ time. As such this edition is split into two sections: the Growth, and the Future.
For the Growth we have called upon seasoned industry figures who have witnessed the changes first-hand to contribute their insights, providing a commentary on where the industry has come from as we contemplate how it might develop. Alongside we feature a timeline of milestones compiled from 15 years of AsianInvestor coverage, interspersed with global events that had far-reaching ramifications.
We begin with Taiwan in the 1980s, a model for how the industry would develop in Asia. We move on throughout the region’s markets, notably the inauguration of pension systems in Hong Kong, Korea, Japan and Australia, as well developments regarding Singapore’s CPF and Malaysia’s EPF. The management of pension assets by third-party firms is one trend that shaped Japan’s growth and it offers lessons to India, where managers are not permitted yet to address the assets of pension providers, which is stymying the industry.
China’s globalisation has become the biggest story. Market growth in China and India will dictate much of the region’s development, particularly in Asean, where output and consumer demand depend on the region’s two giants. We also examine the rapid growth of exchange-traded products in Asia, which have seen their share of the mutual funds industry more than triple in eight years.
Meanwhile on the institutional side we trace the history of our AI300 list of Asia’s largest asset owners back to its roots in 2003, and examine the fastest growing segment: sovereign wealth funds. The seeds of these state investment vehicles were sowed from the Asian financial crisis. While the age of new SWFs is not over yet, they are facing questions over their identity and purpose.
For the Future we consider trends from the impact of dwindling resources and the future of retirement, to RMB internationalisation, the prospects for one Asia fund passport and the rising influence of China and India in global markets. Our final note is an analysis of the digital future and the rising importance of financial technology firms, giving traditional asset managers food for thought on what will be required to survive and prosper by 2030.
The next 15 years promise real change as the region’s asset management industry experiences its adolescent growth spurt. With your support, AsianInvestor will work hard to document the key developments.

Leigh Powell

The Growth
5    Taiwan
       How a sleepy island became one of the largest mutual fund markets in Asia

12   MPF
       A colonial legacy that must now adapt to provide financial security to retirees

14   Hong Kong
       As China became the dominant factor, did HK do enough to secure its future?

18   Singapore
       It has seen success as an investment hub, but has Singapore failed as a funds centre?

21   Japan
       A key market for third-party institutional managers and retail fund distributors

26   Korea
       The institutional market has grown strongly while its funds market has also revived

28   China
       The pace of change accelerates, but the nation is a long way from global dominance     

32   Australia
       Undoubtedly successful as a mature pension savings market, now more outward-looking

36   India
       A new optimism provides opportunities for asset management and pensions

38   Asean
       As core countries of this regional bloc show their true  potential, the future looks bright

40   Islamic finance
       Defying the sceptics, sharia investments are slowly integrating into the mainstream

42   ETFs
       Asian listings have grown and the variety of products improved, but sales need a boost

46   AI 300
       Over 15 years, we have seen the emergence of China and the growth of sovereign funds

48   SWFs
       Sovereign investor assets have grown strongly, but they now face an identity crisis

52   Data Centre
       AI examines trends in retail and institutional wealth and mutual fund growth across the region

The Future
55   Grantham on growth
      Jeremy Grantham, chief investment strategist at GMO, discusses the trends that will shape the next 20 years

60   This is your future
       Environmental, social and governance funds will become part of mainstream investment, but only if they can deliver results

62   Portfolio predictor
       Investors must be mindful that China and India will form an increasingly large component of emerging market portfolios

64   The future of retirement in East Asia
       Societies understand they can’t rely on family support, but there is a divergence on where responsibility should lie

66   RMB: all change by 2020
       As RMB internationalisation plays out, we assess measures for China to be fully integrated into the global economy

68   Breaking down borders
       How many cross-border fund passport regimes will there be in 15 years? Possibly one, or even none at all

70   Keeping growth organic
       It may be some time before we see much in the way of Asian asset managers getting involved in mergers and acquisitions

72   Technology shift
       Asset managers without a strategy to address efficiencies revolutionising the industry will die out

74    AsianInvestor through the ages
        From way back when AI was called Pensions Asia, we take a look at some of AI’s notable covers from the last 15 years  

76    Bookend
        Assessing the top 5 Asia-related books selected from the reviews published at the back of AI since 2012

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May 2015 Magazine
AsianInvestor Magazine

What's in this issue

The story of asset management across Asia
Industry timeline, 2000-2015
Jeremy Grantham discusses future trends
Technology shift to separate the winners