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Aviva Investors combines businesses in Australia (Portfolio Partners), France (Aviva Gestion dÆActifs), Poland (CUIM Polska), Ireland (Hibernian Investment Managers), North America (Aviva Capital Management, MFM International, Aviva Investment Canada), Romania (CertInvest) and the UK (Morley). The group also includes a partnership with Delta Lloyd Asset Management in the Netherlands.
Aviva Investors doesnÆt have wholly owned operations in Asia, and thus, the development of the business in this region will be an on-the-ground build up.
ôAsia-Pacific is a significant part of what we are trying to build globally over the next five years,ö says Aviva Investors Asia-Pacific CEO Craig Bingham. ôIt is critical to our success that we get this region right.ö
At present, Aviva Investors has around A$15 billion ($12 billion) in AUM in Asia, a mere 3% of its global AUM. Because Asia is a new focus for Aviva Investors, the firm expects its AUM in this region to grow by ôsignificant multiplesö annually.
ôOur expansion in the region will also evolve and build on the strength of our existing business in Australia where we manage over A$9 billion ($7 billion) on behalf of retail and institutional clients,ö Bingham says. ôBy integrating our operations, Aviva Investors can take the best of our products and services from around the world and bring innovation to new and existing customers.ö
Aviva Investors has already established an operation in Singapore û which will serve as its headquarters in Asia û and is going to set up a presence in other markets in the region.
The plan is to have four fund manufacturing centres in the region: Singapore through the regional headquarters; in China through its joint venture; in India through a 100%-owned asset management company or a joint venture; and in Australia through Portfolio Partners.
Aviva Investors is building its fund manufacturing team in Singapore, which it hopes to grow to 15 by the first quarter of 2009. The firm already has a property team in place in Singapore. Its strategy worldwide is to separate the property team from the rest of the asset management team, a distinction it is making in recognition of the different skill sets it believes are needed for fund managers specialising in property funds or real property assets.
A Singapore-based head of Asia-Pacific distribution has already been hired, but cannot be named just yet as he is expected to move from his current company sometime in January. Aviva Investors expects to work closely with Aviva Life in building its own platform for distribution in Asia-Pacific. Singapore also serves as the hub for Aviva Life in this region.
Aviva InvestorsÆ venture in China is Aviva Cofco. Since that is not a wholly owned entity, it cannot be folded into the Aviva Investors group and will continue to be run as a separate business. Aviva Cofco was formed when Morley, then the largest fund management arm of Aviva Group, entered into a joint venture with the state-owned China National Oils, Foodstuffs and Cereal Corporations (Cofco), ChinaÆs largest importer of grains and oil, in November 2007.
Aviva Cofco has applied for a license to start fund management operations. Bingham hopes to receive the license by the first quarter of 2009 in order to launch equity and fixed-income products by the second quarter of next year.
In India, Aviva Investors is already in the process of lodging an application for a 100%-owned asset management company. While it is doing that, it continues to entertain possibilities for a joint venture. The firmÆs efforts in India have thus far been led by Anil Sahgal, who is the group head of strategy for Aviva Life. He has been seconded to Aviva Investors to help set up the asset management business there. ItÆs too early to say whether he will serve as CEO of the asset management company in India as this is still under discussion, Bingham says.
Aviva Investors is not in a hurry to enter the market in India, and is still weighing whether setting up a 100%-owned company or entering though a joint venture would be the best strategy.
ôWeÆre a bit slower when it comes to India,ö Bingham says. ôWith the global market conditions and with the way things are panning out, the sense of speed and urgency may have dissipated a little bit and we will just spend some time considering options.ö
In the long run, Bingham believes the extreme volatility in financial markets worldwide, which have depressed share price valuations, is an advantage for fund houses setting up operation in Asia.
ôThe slowdown that we saw in the first half of the year has brought some sensibility back into the markets. I think it enables you to build a more sustainable robust business,ö he says. ôThe events of the recent week have thrown up many potential new opportunities.ö
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