Baring Asset Management has appointed Thomas Kwan from ICBC Credit Suisse in Beijing as its first ever head of Asian debt.
Kwan officially joined Barings on April 4 based in Hong Kong, although currently he is undergoing media training and was unavailable for interview.
Up to now, Barings’ fixed income and currency coverage has been based out of London headed by Alan Wilde, with Thanasis Petronikolos working as the firm’s head of emerging market debt and fixed income investment manager.
But Gerry Ng, managing director of Baring Asset Management (Asia), tells AsianInvestor that the firm felt the time was right to base a business head in Asia for fixed income.
“We do have a critical mass in emerging markets and a long-term track record, and we also have long experience in managing fixed income products,” he tells AsianInvestor. “We have looked closely at the opportunities and we think the time is right to make an investment.”
At present Barings offers Asian investors six regional or global fixed income products, namely a global bond trust, a US dollar reserve fund, an emerging market debt local currency fund, a high-yield bond fund, an aggregate bond fund and an international bond fund.
This latest move to introduce a fixed income head in the Asia region suggests it will look to launch more tailored solutions to local investors.
Ng highlights the potential of Asia’s fixed income marketplace in which local currency appreciation is expected to be a significant source of capital appreciation.
“We feel that Asian bond markets offer good risk-adjusted returns for investors,” he states. “There are a number of Asian currencies that we believe remain undervalued, particularly compared to levels before the credit crisis in September 2008.
“We think strong Asian economic fundamentals, relatively high interest rates and rising capital flows will help currency appreciation and drive the markets forward. Emerging market countries are also net creditors to the developed world, so external balances are generally robust and the reserves are rising. These are all positives.”
Barings has 15 investment professionals covering equities for Asia ex-Japan out of Hong Kong, led by Colin Ng. The firm has offices in Taiwan and Korea, although these focus on sales and client servicing.
On the debt side, Kwan is Barings’ first appointment, and as such one of his first tasks will be to assess the market to create an appropriately sized team. “There is no commitment in terms of numbers yet,” says Ng, “but [Kwan] will be looking at the process and will decide what is required.”
Overall Barings manages $51.6 billion in assets globally, with Asia accounting for 18% of that figure, or $9.3 billion. Of the Asia figure, equities make up $5.6 billion (61%) and fixed income just over $2 billion (22%).
Kwan joins Barings’ Hong Kong team from ICBC Credit Suisse in Beijing, a joint-venture founded in June 2005 that manages equity and fixed income mutual funds for its clients.
Kwan had responsibility there for global macro research and asset allocation strategy as well as developing and managing absolute return global fixed income, currencies and asset allocation products.
He has more than 11 years of investment management experience, including a further two years at Credit Suisse in Singapore, two years at Prudential Asset Management and five years at First State in Hong Kong.