Following an aggressive Asian hiring push in recent months, Aviva Investors has taken another major step in the region by obtaining a capital markets licence in Singapore.
The asset management arm of UK insurer Aviva has operated in the Lion City for three years under exempt fund-manager status, but the licence gives it the “latitude and commercial backdrop to invest more committedly”, says Tahnoon Pasha, Asia ex-Japan chief executive for equities and fixed income in Singapore.
The firm can now provide fund management services to both institutional and retail clients, across segregated mandates and closed- and open-ended funds. Previously the firm couldn’t sell at all to retail clients and was limited in what it could offer to institutions.
Aviva does not have an equivalent licence in Hong Kong and has no current plans to apply for one, says Pasha. It will, however, be active in the Hong Kong renminbi and H-share market out of Singapore.
The firm is also looking at ways of getting involved in the RMB funds business, says Pasha.
Aviva Investors is also investigating setting up a business in mainland China. The firm is awaiting approval from the State Administration of Foreign Exchange for a qualified foreign institutional investor (QFII) quota, having got the green light from the China Securities Regulatory Commission.
As for other markets, Aviva Investors is unlikely to put equity or fixed-income investment management capabilities on the ground in Japan in the near-term, he says, although it has Japanese investment manufacturing capabilities in the UK. “Japan requires a dedicated level of work, and we’ll be pretty tied up with what is happening in the rest of Asia [for the time being].”
The company’s main regional focus in the coming months – in terms of institutional or retail business – is likely to be on selling to distributors and intermediaries, says Pasha, who outlines how the overall business breaks down.
Aviva Investors’ Asian business is entirely business to business, he says: “It all goes to a gatekeeper or institution one way or another.”
As for selling “the world into Asia”, it is likely to be selling substantially into the retail space in the first instance, but is also keen to offer core strategies to institutions.
With regard to selling “Asia to Asia”, Pasha says he expects to sell equally on the one hand to wealth managers (consumer and private banks and IFAs) and on the other to insurance-linked product clients.
As for institutional sales, he suggests Aviva Investors’ asset-and-liability (ALM) management offering is probably the most pertinent one in the region.
In terms of hiring, Aviva has brought several senior executives on board since Pasha joined in July. They include Manish Singhai and Kevin Talbot, inaugural CIOs for Asia equities and fixed income, and Bart Coenraads to lead multi-manager real estate activities in Asia.
However, Carolyn Lu, who also joined last year as Asia head of business development from Société Générale, has since left the firm. AsianInvestor could not immediately ascertain her current whereabouts. Lu's duties have been assumed by the rest of the team, and Aviva Investors has no plans to replace her.
Meanwhile, there’s a lot more recruiting to do, says Pasha. The firm is at about 70% of its baseline strength for 2011 in equities and fixed income and will be expanding again in 2012.
In addition, Aviva Investors plans to start hiring an ALM structuring team in Asia this year as soon as possible. The firm already has an ALM team in the UK, which will be closely involved in the hiring process of the new staff, who will form part of a single worldwide ALM architecture.