The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Under the agreement, ABN Mellon will provide not only global custodian to one of ChinaÆs largest commercial banks, but will offer securities lending services to ChinaÆs second-largest commercial bankÆs international assets. Within the global custody portion of the mandate, ABN Mellon will provide traditional custody services, settlement and safekeeping to ABCÆs international assets.
The relationship will also extend beyond the traditional custodial services and into the realm of ChinaÆs qualified domestic institutional investor (QDII) scheme. According to ABN Mellon, ABC has appointed the custodian with handling overseas accounting and investment mandate reporting to qualified domestic institutional investors (QDII) in China.
Under Chinese law, all offshore investments by investors like asset managers or insurance companies must be routed through a local Chinese bank. In turn, local banks like ABC need to work with foreigners to provide safekeeping, accounting services and required regulatory reports, all of which ABN Mellon will provide.
"ABC has deep relationships with local insurance companies, asset management firms and other banks in China, and we see this appointment as a significant step for us in penetrating the QDII space," says William Mak, general manager at ABN Amro Mellon Global Securities Services in Asia. "We see QDII as the key theme facing global custodians in China. Although funds under the scheme have not been building up as much as expected due to the buoyant domestic markets, QDII will pick up and become a long-term business for us."
The relationship between ABN Mellon and ABC was established last year. In 2006, the established partnership between the two firms included knowledge transfer on ABN MellonÆs custodian experience ranging from operations services to more value-added solutions like securities lending.
The two firms partnered for a joint bid for a multi-million request for proposal (RFP) to handle the custodian duties for one of ChinaÆs biggest insurance players. The RPF is still in the market and it is understood that several international and local names are vying for this business.
This marks a continuation of a relationship between ABN Amro Bank and ABC. The two lenders have forged a relationship on business lines such as capital markets, asset securitization and derivatives training.
Outside of China, ABN Mellon also has its sight set another North Asian market, with Korea earmarked as target destination for its services.
"We also see opportunities for our business to grow in Korea in the coming months," says Mak. "The country has a big pension market and we believe our experience in European markets such as the Netherlands, Sweden and Ireland would translate well into Korea."
ABN Amro Mellon Global Securities Services, a 50/50 joint venture between ABN Amro Bank and Mellon Financial, focuses its remit outside of North America and has increasingly looked to Asia as a part of its global growth strategy. Aside from its Singapore offices, the global custodian has a representative office in Beijing, which opened in June 2006. The firm also has Hong Kong representation.
Record low borrowing costs in Australia are feeding demand for the country's real estate, with domestic and global investors raising their allocations into the sector.
Experts have a diversified view on the appeal of private assets across the region, but one thing's for certain - inflows are rising, particularly into China and the US.
Malaysia's Armed Forces Fund hires new CEO; Canada's Omers appoints Asia capital markets managing director; HSBC Asset Management creates alternatives unit, appoints CIO as its head; Bank of Singapore names global wealth head; Aware Super hires IFA head; Hong Kong names acting head for MPFA; Schroders adding to Asia ESG headcount; and more.
Asian fixed income assets – including Hong Kong dollar (HKD) bonds – are luring growing numbers of global investors who are striving for reliable and consistent returns amid macro uncertainty compounded by rising inflation and rates, according to HSBC Asset Management.