In April, AsianInvestor revealed the winners of its annual Asset Management Awards. The biggest prizes are the Marquee Awards, which go to the leading institutions across key areas of the investment industry.
Our decisions were based on a blend of quantitative and qualitative research, including feedback from third-party sources.
Today we explain why Hermes EOS was named the winner of our new award, for best ESG strategy adviser, and what impressed us about Amundi's regional business development this year.
Best ESG Strategy Adviser
While environmental, social and governance (ESG) issues remain less prevalent in Asia than in Europe, more asset owners and investors are beginning to engage with the concepts. Hermes EOS is proving one of the most proactive firms in encouraging clients to do so, which is why it wins our inaugural ESG Strategy Adviser award.
The purpose of Hermes EOS is to engage with the companies and governments in which it invests, to better encourage more transparency and, ultimately, superior returns. It does so across ESG considerations, with governance taking the most prominent part, as well as raising strategy, risk and stewardship issues.
The stewardship service provider helps 42 long-term investors across nine countries with the stewardship of £170 billion ($219.7 billion) of assets. In doing so it has taken on companies such as car maker Volkswagen and Deutsche Bank for perceived governance failures.
It is gaining traction in Asia too, particularly since more countries began introducing stewardship codes in an effort to improve listed company behaviour and responsibilities. Hermes EOS gave input for the stewarship codes that have been introduced in Malaysia, Singapore, Taiwan and Japan.
The rising engagement of stewardship in Japan in particular led the Pension Fund Association of Japan in March 2016 to appoint Hermes EOS to create and introduce stewardship activities for the ¥12.7 trillion ($113.1 billion) of assets it manages. In part due to this appointment, the company began campaigning for changes at over 30 Japanese companies later in the year.
The benefits of this can be hard to fully quantify, but Hermes EOS argues that successful engagement can raise outperformance by as much as 7.1% cumulatively, while having conducted research that claims companies with poor governance can underperform by up to 30 basis points.
Best Business Development
In recent years Amundi has pressed ahead with a business plan aimed on building its capabilities across Asia, opening a Taiwan office in 2012 and one in Thailand in 2014, even as it acquired the fixed income funds business of Malaysia’s KAF Fund Management, also in 2014.
These efforts, combined with Amundi’s fund management capabilities, helped the French firm to amass over $40 billion of additional assets from the region last year, taking its total regional AUM to $151.68 billion.
It is growing in large part by targeting major institutional investors for new mandates. In this it enjoyed success last year, gaining a US investment-grade bond mandate for several hundred million dollars from a Korean investor last year, while another Korean asset owner gave it a $50 million mandate, also focused upon US investments.
Amundi is also gaining traction on the retail side, with one major international asset manager investing well over $100 million into one of its US dollar strategies on behalf of its retail investors last year. The investment was made due to the strong performance of this mutual fund.
The fund manager is conducting product launches as it aims to build its capabilities. Amundi can point to the launch of the Amundi Hang Seng HK 35 Index ETF, a debut offering by the company in Asia. It followed this with the Amundi FTSE China A50 Index ETF.
Added to that, on December 30 it gained approval from Hong Kong’s Securities & Futures Commission to launch the Global Dynamic Allocation Protect 90 Fund, which Standard Chartered is distributing for the first six months.
It has also been hiring. Most notably it brought in Vanessa Wang joined as head of institutional business devleopment for North Asia from Citi, where she had been head of pensions, while Stephen Ma joined from BMO Global Asset Management as a director for investment.
Next up are plans to expand into Southeast Asian countries, either via partnerships or through acquiring local fund businesses.
Keep an eye out for more explanations of this year's Marquee Award winners.
Click here to learn why Citi was the leading asset services provider and consumer bank
Click here to discover why UBS was the top private bank and JP Morgan had the best retail product