BNY Mellon is busy building an investment and distribution team in Singapore through a newly formed subsidiary after receiving the appropriate licence earlier this week.
The US firm’s only other portfolio management team in Asia is in Tokyo, a 90-strong unit that began trading equities at the start of this year. But it is the firm’s eventual goal to build out local investment capabilities across the region, says Wendy Lim, Asia-Pacific head of business development and marketing for BNY Mellon IM.
She is also the newly appointed chief executive for Singapore and continues to report to Alan Harden, Asia-Pacific CEO.
“We’re trying to build out our local investment capabilities across Asia Pacific, [and] Singapore is our next big step,” Lim tells AsianInvestor. She declined to offer a timeline or specifics for the regional plans.
The Singapore capital markets service licence, issued on Monday (November 11), will allow BNY Mellon IM to offer a full range of services, including research, portfolio management, marketing and sales. Previously the office was solely used for providing research.
This follows the firm receiving a licence from Hong Kong’s Securities and Futures Commission in June, allowing it to launch a separately managed account business. BNY Mellon declined to discuss any further plans in the territory.
The firm says it hasn’t decided which strategies it will launch in Singapore, but there will be funds investing in a range of asset classes, including equity, fixed income, multi-asset and alternatives.
“We’ll leverage our existing capabilities, and we really do cover [everything] all the way to alternatives,” Lim says. She acknowledges that traditionally, local investors tend to prefer Asian funds, but declined to offer more detail on strategies or offer a specific timeline. “It’s going to be a journey. Rome wasn’t built in a day.”
The firm will initially focus on selling to high-net-worth individuals and institutional investors in Singapore and elsewhere in Southeast Asia – notably Brunei, Indonesia, Malaysia and Thailand – but plans to eventually distribute to the retail community.
These initiatives will involve a hiring spree over the next 12 months to boost the firm’s Singapore headcount to 50 by the end of 2014 from 25 today. The latest senior hire in Singapore was Mark Speciale as Asia-Pacific head of institutional distribution, who joined in July.
It’s unclear what the split will be between investment and sales professionals, but Lim anticipates that as BNY IM Singapore’s AUM increases, the sales headcount will outstrip that of the investment team.
The appeal of having full investment and sales capabilities in Singapore is clear. Its proximity to Southeast Asia’s institutional and high-net-worth community coupled with recent developments in the fund passporting schemes make the Lion City extremely attractive for foreign firms.
The Lion City is involved in two Asian passporting schemes – the Asean scheme, which includes Singapore, Thailand and Malaysia, and the Asia region funds passport (ARFP), which covers Australia, New Zealand, Korea and Singapore.
Passporting is “a big development for the Asian asset management industry”, Lim says. “We’re closely monitoring the development of both schemes and are in the process of assessing [what our] participation will be.”
The schemes remain separate for now, although some have speculated that they will merge within five years. However, Lim says: “I wouldn’t want to speculate on [the schemes merging]. Both initiatives have different objectives with different participants.”
BNY Mellon’s global AUM totalled $1.5 trillion as of September 30, with Asia-Pacific-sourced assets accounting for $94 billion.