Baillie Gifford has established a trading team in Hong Kong, its first in Asia, showing that business is proceeding for some despite the coronavirus outbreak, months of protests in the city, and cutbacks by other asset managers.

The Scottish fund house hired James Li from rival firm Barings in December and relocated Martin O’Brien from Edinburgh in January, raising its Hong Kong headcount to 11, a spokeswoman told AsianInvestor.

Martin O'Brien

Both hold the title of senior investment trader, but O’Brien has also been appointed to the board of Baillie Gifford Asia (Hong Kong) and is the director responsible for trading. The duo will initially trade cash equities and futures, but other asset classes will be rolled out in due course.

The aim is to enhance service and capabilities for clients during Asia trading hours, the spokeswoman said, declining to comment further on the firm's plans. 

This makes sense given the continued growth of Baillie Gifford's Asia-sourced assets under management, most of which are from pension funds.

James Li

Of the firm's £218 billion ($290 billion) in global AUM as of December 31, £21 billion is sourced from Asia (ex-Australasia) and £9 billion from Australasia. That is up from around $15 billion sourced from Asia in early 2016 when it set up the Hong Kong office and had £123 billion ($175 billion) in AUM.

It also seems likely that Baillie Gifford is gearing up to invest more into regional assets, especially in China, as the mainland market continues to open up and more investors trade via Hong Kong's Stock Connect link with Shanghai.

After all, the growth equity-focused manager launched a wholly foreign-owned enterprise (WFOE) in Shanghai last year, with the initial aim of building up its local investment and research capabilities and network. 

Baillie Gifford has continued the same approach with its set-up of the Hong Kong trading team as for building out in other areas: combining local hires with know-how from head office.

O’Brien has been with the firm for 31 years, while Li was head of Asian dealing at Barings for five-and-a-half years, but left amid recent cuts to the equity teams.

Similarly, Baillie Gifford poached Amy Wang from Aberdeen Standard’s mainland unit to head the China WFOE and relocated John MacDougall, a global equities manager and 19-year veteran of Baillie Gifford.