Aviva Investors is busy building its Asia equities and fixed-income capabilities, having last week unveiled twin CIO appointments out of its regional headquarters in Singapore.
The global asset management business of the world’s sixth largest insurer has hired Manish Singhai and Kevin Talbot as inaugural Asia-Pacific CIOs for equities and fixed income, respectively.
Singhai joined after closing down Arjava Capital, the market-neutral Asia ex-Japan-focused hedge fund he set up in 2008. Prior to that he spent a decade at AllianceBernstein (formerly Alliance Capital) – half of which was as CIO for Asia ex-Japan equities.
“My entire buy-side career has been at asset managers with an insurance parent,” Singhai notes (AllianceBernstein is owned by Axa Group).
Talbot, meanwhile, arrived from ANZ Private Bank in Singapore, having previously worked at AMP Capital Investors in Sydney for 10 years, most recently as Asia CIO for listed assets. He also spent 13 years at National Mutual Funds focused on Australian fixed income.
Both men have taken on a major greenfield project at Aviva Investors under Tahnoon Pasha, who was appointed Asia ex-Japan CEO for equities and fixed income in mid-2010.
“Aviva is a new entrant to the region in terms of locally based equities and fixed-income capabilities,” says Singhai. “I would describe it as a greenfield project but not a start-up. Essentially I am part of the firm’s foray into developing locally based investment capabilities.”
With a real estate team having been in the region for at least two years, Aviva Investors is now striving to operate across three asset classes.
“I have been charged with developing a range of products and services in the equities area,” says Singhai. “In order to do that I am focused on getting an investment team in place, and four investment professionals will have started by the end of this month.”
The firm will seek to market its Asian investment products and services to retail and institutional clients across the globe. Its key markets in this region are China, Hong Kong, India, Korea, Taiwan and Asean, while its largest institutional client is parent Aviva.
“The approach would be bottom-up, but I believe strongly that Asian equities investment should not be boxed into a growth or value style,” states Singhai. “These markets continue to evolve and develop, and my style is pragmatic.”
As the firm’s product capabilities and client base grow, Singhai suspects his equities team could stretch to 12 investment professionals within two years. He confirms that while he will initially focus on traditional long-only products, his team also aims to explore absolute return products.
“Certainly we recognise we are not an early entrant to this market [Asia],” he notes. “Therefore in order to demonstrate our capabilities we have to differentiate our product offering from what is available.”
On the fixed-income side, Talbot (pictured left) has direct responsibility for country selection, foreign exchange, duration and security selection within the government sector. He also oversees sector allocation and asset allocation, but not credit analysis, stock selection and portfolio positioning.
Similarly he will also start with a five-strong team, potentially adding another two or three within 12 months.
“My ambitions in building a world-class team and capability will be to substantially increase AUM from both retail and institutional sectors, initially from internal sources, but as we build up our track record and credibility there will be a huge focus on winning external mandates from clients across the globe,” he states.
Over the next few years, Talbot says he expects to win $5 billion from institutional clients and $1-2 billion from retail clients. The firm will also look to develop standalone country, credit and FX funds “where and when appropriate”.
Talbot suggests there is a structural shift occurring in terms of the relative value of Asian assets in general, including fixed income and currencies.
“This shift will be the main positive as Asian wealth continues to grow,” he notes. “The main pitfall will be that policy mistakes will be made along the way and markets in this part of the world are still relatively underdeveloped. However, for active managers this is also a positive and a major opportunity to outperform.”
Aviva Investors operates in 16 countries in Asia-Pacific, Europe, North America and the UK and boasted £248 billion ($386 billion) in assets under management as at June 30, 2010. It does not break out its Asia figures publicly.