Ian Lui, the influential former CIO of Shin Kong Life, has re-emerged from gardening leave as a chief investment strategist at rival firm Nan Shan Life in Taipei. Nan Shan is an insurance subsidiary of AIG in Taiwan. It is the fifth largest insurance player in Taiwan by premium income, following the recent market consolidation with the mergers between Fubon and ING, as well as China Life and PCA Life.
A Nan Shan spokesperson confirms Lui started his new role last week. In Lui's new capacity, he will be responsible for the overall investment strategy of a portfolio valued at NT$1.36 trillion ($40.99 billion) as of end March. In addition, Lui will also head up all special investments at Nan Shan.
Most importantly, sources believe Lui will command a never-seen-before authority over Nan Shan's overseas investments.
Until now, AIG's various insurance arms were responsible for managing domestic assets for their general accounts, but repatriated a large portion of their assets to New York and London, where assets could be run on a global basis, by teams experienced in a wide range of traditional and alternative asset classes. The degree of repatriation depended on local regulation. For example, AIG's Thai operation is one of the biggest domestic investors, because Thai law mandates insurance companies can't invest much abroad. In the case of Taiwan, on the other hand, insurers have been free to invest 35% or more overseas.
But this is changing, according to sources familiar with the company. They say AIG is transferring its stake in Nan Shan to a special purpose vehicle as part of the parent company's need to restructure, anticipating a possible sale of Nan Shan. (AIG Global Investments is also for sale.) As a result, it is handing back responsibility for investing the local unit's assets, including the overseas portion of the portfolio.
Estimates as to how much Nan Shan has outsourced to New York and London vary. The figures of AIG's internal outsourcing arrangements for local insurance businesses from Korea, Philippines, Taiwan, Hong Kong, Singapore to Thailand are confidential, says an AIG spokesperson.
Now the decisions as to where to invest and whom to invest with will fall to Lui, the sources say.
The move also implies that other pools of assets managed by AIG affiliates elsewhere in Asia may now be run by local managers. AIG and its affiliates still remain top-tier insurance providers in China, Hong Kong, Korea, Malaysia, the Philippines, Singapore and Thailand. Not all of these local investment teams may be able to call the shots, however. Observers wonder if other units will also be looking to beef up their investment capabilities, and if this could lead to more investment mandates to third parties from these local insurance companies, depending on whether these businesses are sold, and to whom.
A spokesperson responding on behalf of John Chu, CIO in charge of AIG's Asia insurance assets, refused to comment on this story. The spokesperson at Nan Shan in Taipei confirms Lui's new role, but did not respond to requests to confirm the repatriation of assets.