A passing of the baton often prompts a firm's new leadership to take stock. And so Barclays Global Investors has been in a reflective mood about its position in Asia ex-Japan, now that this operation, managed on a day-to-day basis by Robert Haber in San Francisco, is the responsibility of Nigel Williams in London, who is the region's chairman (along with Europe).

Williams is the person running BGI's non-US business, except for Japan and Australia, which maintain independent lines. This represents an amalgamation of its international business, as before Asia ex-Japan reported to Garrett Bouton in California, who has retired.

Whereas Bouton ran the firm's iShares exchange-traded funds business, Williams is a purely institutional player. On a recent visit to Hong Kong, however, Williams denies this means BGI Asia will be scaling back its retail efforts.

The firm has never been a classic retail player anyway, but, "There will be no de-emphasising of our interest in ETFs," he says. BGI will continue to pursue partnerships to launch new ones or to increase cross listings around Asia.

Although the iShares Taiwan and Korea funds listed in Hong Kong have low trading volume on the Hong Kong Stock Exchange, the number of units created - and hence the assets under management - have doubled in size thanks to those listings. "As the asset manager, they have been wildly successful for us," he says. He concedes the deal is less sweet for the Hong Kong exchange, but says BGI will continue to plug ETFs to mid-tier firms in Asia that would prefer to trade iShares in their own time zone.

If ETFs have been a mixed bag, BGI remains a huge institutional player, sourcing $13 billion from clients in Asia ex-Japan, of which 25-30% is allocated to BGI's active quant strategies. That's impressive but still pales besides the $800 million that BGI manages globally. "There's a lot of room to grow," Williams says, noting that Korea and Taiwan are the firm's top prospets. Hong Kong and Singapore are also important, with China a wild card - it could be a massive source of business, or disappoint.

To ensure business from the region's top 35-40 institutions, BGI has established a network of relationships around North Asia, including Samsung ITMC in Korea, Fuh-hwa International Investment in Taiwan and Boshi Fund Management in China.

In all these cases, BGI has partnered with them to help launch domestic products, to learn about these markets, and to get help with distribution and access to local institutions. Williams says in some cases, BGI would like to explore deepening these relationships. If that doesn't happen, it may be happy to continue the status quo, or broaden its partnerships.

The most recent is with Boshi, which it helped launch a Rmb5.2 billion index fund that tracks the Xinhua/FTSE 50. It was the biggest equities fund launch in China to date. "It may be a mutually profitable relationship based around discreet products, but it's more likely that if we sit down and understand our business strategies, we can formalize something more profound," Williams says.

The reason is that these relationships have their limits. While BGI is happy to do a few product launches, which helps it understand the local business environment, it is not willing to provide the same knowledge transfer regarding its active quant capabilities. Boshi has learned how to do a basic index fund and can probably spin out other ones on its own. So the status quo is finite. "In the next 12-18 months, we will either integrate more with Boshi, or we will not," Williams says.

Taiwan is also hard to read. BGI's partnership with Fuh-hwa had two goals: launch ETFs, and get access to Taiwanese institutions. The government decided to let rivals Polaris International Securities Investment Trust, advised by State Street Global Advisors, to launch the first ETF instead.

The institutional market is a big question mark. BGI is bidding for one of two international indexed equities mandates being offered by the Public Service Pension Fund, the pioneer in overseas investment (see AsianInvestor magazine's October/November cover story on Taiwan institutions). But no one knows how this market will turn out, or what institutions want from fund managers.

Established markets such as Hong Kong and Singapore have a limited number of institutions that use specialist mandates, and BGI isn't interested in chasing small balanced mandates. Singapore's private pension reform could prove an interesting target if it achieves scale, but this also remains an opaque situation.

Therefore the outcome of BGI's relationships with its partners will probably determine how much growth the firm can achieve in Asia.