Nikko Asset Management has hired Blair Pickerell in Hong Kong as head of Asia and global chief marketing officer. The move is a bid by Nikko’s top management, including CEO Tim McCarthy, to forge the region’s leading independent asset-management firm.
Usually this sort of thing is PR guff, but Pickerell and McCarthy have the experience to back up their ambition for Nikko AM to become the successor to the old Jardine Fleming Asset Management, which really was for a time the region’s leading independent fund house.
JF was one of the pioneers of mutual funds and retail investing in Asia dating back to the 1970s. The Mandarin-speaking Pickerell played a leading role in expanding its footprint beyond its Hong Kong roots, notably to Taiwan in the late 1980s and early 1990s.
In 1993 he left Jardine Fleming’s unit-trust business to move to Jardine Pacific, and the role was taken up by McCarthy. Although the two have never before worked side by side, they have remained in touch – both from California, both with Harvard business school degrees, both with deep experience in Asian funds and marketing, and both keen to develop independent asset-management firms based in the region.
Says Pickerell: “Too many asset managers today are owned by non-asset managers, like banks or insurance companies. They don’t fully understand asset management, and they rotate their own executives in and out of the fund company. Or their headquarters is in Boston or London, and the senior executives spend more time talking with the head office than they do with their clients and staff.”
Post-financial crisis, many global fund managers are hobbled by ongoing problems in their home markets, and haven’t been able to dedicate the attention or resources to capture the burgeoning Asia growth story, he adds.
Pickerell has been on gardening leave this summer after leaving Morgan Stanley Investment Management as its Asia-Pacific managing director. Before that he ran HSBC Global Asset Management in Asia until early 2007.
He argues that Nikko will be the right vehicle to recreate the spirit of the old JF. (Pickerell didn’t comment on JP Morgan Asset Management, which today owns the JF businesses.)
According to AsianInvestor magazine, Nikko AM sourced $113.3 billion of assets from the Asia-Pacific region as of December 31, making it the eighth biggest manager of Asia-Pacific assets.
Around 15% of this is sourced from Asia, with the rest from Japan, says McCarthy. Nikko has a 40% stake in Shenzhen-based Chinese fund house Rongtong and a longstanding investment, trading and sales hub in Singapore. It has an embryonic JV in India with Ambit. It runs over $1 billion of China A-shares via a QFII quota.
Pickerell says Nikko is already a successful player in the region’s two most difficult markets, China (with the JV and a QFII portfolio) and Japan, where it is a major fund house, thanks in part to its willingness to contract sub-advisers for specialist mandates.
McCarthy says Pickerell’s role will be to build on these existing components, as well as expand Nikko’s remit throughout the region. This will include getting advisory and other licences in onshore markets (the firm is applying for relevant licences in Hong Kong), developing a pan-Asian mutual funds business and selling its Asian equities expertise to global investors.
Among Pickerell’s initial tasks is to oversee the opening of a Hong Kong office.
This is not a new direction for Nikko AM. For the past six years, it has not been a typical Japanese firm. On the contrary, it was restructured under the ownership of Nikko Cordial Securities and Citi as an independent business. McCarthy joined from Fidelity International Japan as CEO along with fellow Fidelity veteran Bill Wilder, who serves as chief investment officer.
They and their senior management team owned shares in the business and tried twice to list Nikko AM as a separate business. Market troubles or problems with their parent companies forced them to hold back. Last year, the troubled Citi sold its stake to Sumitomo Trust & Banking, which is now the main shareholder.
So Nikko AM is not independent, although it continues to be run with relative autonomy by its management team. The main partners continue to keep their shares. McCarthy and Pickerell declined to discuss the economics of the company or whether they will seek a public listing for Nikko AM.
The other senior managers include CFO Frederick Reidenbach, formerly CEO of Fidelity subsidiary KVH Telecom; chief legal officer David Monroe, former Fidelity Japan’s chief compliance officer; and Charles Beazley, London-based head of international and institutional business and previously chairman of Gartmore Japan.