Aussie retail fund house aims at Asian institutional investor market

First State Investments' regional business has gone through a series of re-brandings, personnel defections and declining fund NAVs in the wake of the Nasdaq bubble burst. The Australian fund manager's Singapore operations have stabilized and returned to profitability, thanks in part to the leadership of Lindsay Mann, who joined as CEO in Singapore during early 2001 from AXA Investment Managers in Hong Kong. Now Mann is in the process of building a new institutional business for the restored firm.

"We have returned to profitability and in 2001 our Asian funds performed well," Mann says. Global equities performance has improved after transitioning the management team to London from Singapore last year. But he acknowledges the firm still has a way to go before institutions and consultants widely recognize its global investment abilities.

"We haven't had a concerted approach to selling to institutions," Mann says. "We've just been selling our Asian ex-Japan equities capability. With the London team we now have a global approach to marketing, a global relationship with consultants and a global means of developing products. We are obviously strong in Australian asset classes but that's just a small market segment in Asia. We've added global equities and emerging markets expertise, although we are still building our global bond capability."

Already institutions in Singapore account for about 25% of the firm's locally sourced assets under management (he declined to quantify AUM). The anchor institutional client is Hong Kong affiliate CMG Asia, which sources funds from its Hong Kong Mandatory Provident Fund and life insurance business. With that as a base, Mann is spending more of his time selling the firm's new global expertise to Asian institutions as well as its Asia ex-Japan equities business to global accounts.

Meanwhile the firm is also looking how to expand its footprint in North Asia beyond the presence in Hong Kong. "As a group First State is acquisitive," he notes, declining to discuss the firm's strategy further.

The firm was acquired in 1999 by Colonial in Australia which named it CMG First State, but when Commonwealth Bank of Australia bought Colonial in 2000, it then decided to get rid of the "CMG" moniker.