In recent weeks, AsianInvestor has reported on a number of fund management companies that have made cuts to their retail operations in Asia, which reflects a widely held view among executives that this segment is moribund. Instead institutions, which remain cash rich, are the more likely source of continuing and new business.

AllianceBernstein's CEO for Asia ex-Japan, Augustus "Augie" Cheh, doesn't see it that way. True, Suzanne Ton, who had been in charge of retail distribution, has recently left the firm. Cheh has taken personal responsibility for wholesale distribution relationships, however, and he thinks this will be as important a business driver this year.

"Retail in Asia will respond quickly; in fact it has already begun to do so," Cheh says. The gloom and doom about retail may hold true for America and Europe, but Asian retail investors have already been through so many trials (notably the Asian financial crisis, the tech bubble and Sars) that they've learned markets will rebound.

Cheh came to Hong Kong from New York in 2005. Back in the United States, he had been a fixed-income portfolio manager and trader at JP Morgan. He joined AllianceBernstein's sales and marketing team in 2003, initially to sell fixed-income products. When he came to Hong Kong he was in charge of consultant relations and mandated to drive the business regionally.

His focus until recently has been corporate; helping drive the overall business in Asia-Pacific and liaising regularly with headquarters in New York. But AllianceBernstein has a new global CEO, Peter Kraus, who has amended the firm's strategy in the wake of seeing total assets under management nearly halve to $452 billion in 2008. Kraus, a veteran of Goldman Sachs' investment management team, replaced Lewis Sanders, who had served in the role since 2000, when Alliance Capital and Bernstein were merged, and who had previously run Bernstein.

AsianInvestor has reported on other firms in the region axing expensive, senior retail sales heads, including Allianz Global Investors and Deutsche Asset Management; on how some institutional firms that had moved into the retail space in recent years have swung back towards an institutionally biased model; and how other fund houses with strong retail backgrounds such as Fidelity and Schroders are realigning resources towards institutional sales.

While AllianceBernstein has followed suit by trimming the executive handling retail business, Cheh intends to pursue a more aggressive path when it comes to wholesale relationships.

"We've learned a lot from the experience of the past year," Cheh says. Although the firm has no intention to change its focus on deep value and deep growth (from the Bernstein and Alliance sides, respectively), he acknowledges it had been too rigid in other ways.

For example, during the bull run of 2005-07 there was a clamour among distributors for Bric strategies. AllianceBernstein has China and India funds that have sold well in the region's markets, but it was uneasy with engineering and flogging a product that it didn't think would serve investors well. Instead of providing something like a Bric strategy, it stuck to its guns - and, as a result, distributors looked elsewhere.

Similarly, the firm closed its popular India fund in Taiwan because it wanted to protect performance, but this annoyed its distributors.

Cheh says he wants to be a partner to distributors, without sacrificing a sense of duty towards the firm's investor base.

Meanwhile, he sees retail investment expanding in Asia. Since January, gross and net sales have risen month-by-month, especially for fixed income but also for global equities. In March and April, a number of AllianceBernstein's distributors reported fund flows had turned positive. Flows so far have come from Hong Kong and Taiwan.

Cheh does worry that many retail investors don't understand fixed income funds, and perceive more risk in areas such as high-yield than in G3 portfolios, despite the vast gulf in spreads. (AllianceBernstein is one of three firms selected by the US Treasury Department to manage its portfolio of assets issued by banks and other institutions involved in the Capital Purchase Program under the Emergency Economic Stabilization Act.)

But he says Asia will be a bright spot for the firm this year, both from retail and institutional clients. "Retail will come back first," says Cheh.