BNY Mellon is looking to grow its institutional distribution business in Asia.
Having just hired Mark Speciale as Asia Pacific head of institutional distribution based in Singapore, a newly created position, the US investment manager and services firm aims to expand its business both in terms of its investor-base and personnel, Alan Harden, chief executive officer for BNY Mellon’s Asia Pacific investment management business, tells AsianInvestor.
“There are great growth opportunities [in Asia]. We’re looking to enhance it now that Mark’s on board,” Harden says.
In his role, Speciale will reach out to new institutional investors, namely sovereign wealth funds, pension funds and insurance companies in the region, as well as maintain the firm’s existing client-base.
He joins from investment management firm Capital International, where he has worked since 2000, most recently senior vice-president and head of sales and client services for Asia Pacific ex-Japan. Previously he worked at fixed income manager Fischer Francis Trees & Watts, heading its business development efforts, also for Asia ex-Japan.
Harden declines to put a number on how much BNY Mellon hopes to raise in Asia, although he does anticipate significant asset accumulation over the next few years.
Of BNY Mellon’s $1.4 trillion AUM globally, some $86.5 billion is sourced from Asia Pacific.
On the personnel front, BNY Mellon has around 20 dedicated institutional sales and service executives in Hong Kong and Singapore, all reporting to Speciale, who will seek to increase the headcount, Harden adds.
He notes that as Asian institutions become more sophisticated, they are increasingly turning more towards investment managers, a trend he sees as likely to continue amid volatility.
The recent drop in equity markets – the CSI300 fell 15.6% in June, triggered by liquidity tightening in China – has sent many investors to the sidelines. According to Shanghai-based consultancy Z-Ben Advisors, assets in China-focused mutual funds fell to Rmb2.44 trillion ($398 billion), from Rmb2.79 trillion at the end of 2012.
While Harden argues recent volatility is hardly surprising and is normal market activity, it does raise the question of when best to rotate from fixed income into equities, he notes. “That transition is a tricky task,” Harden says. “Obviously you don’t want to be too early or too late.”
As such, liability matching has become even more important, especially amongst sovereign wealth funds, whose primary purpose is to “continue to build wealth in their [respective] countries”.
“We’ve been doing a lot of work to help create solutions and programmes that help [wealth] accumulation. That involves creating portfolios across many things, including listed equities, unlisted [equities] and alternative investment options,” Harden says, noting private equity in particular is good as part of a pension’s portfolio. “Mixing all of the different types of strategies and solutions within the group [is essential].”
The firm is working on a number of initiatives – in June BNY Mellon received the required licence from Hong Kong’s Securities and Futures Commission to set up a separately managed account (SMA) business later this year, and is now looking to partner private banks through its SMA business.