The chairman of joint-venture securities company BNP Paribas TCB Asset Management has spoken of his plans to develop a new product line for corporate clients in Taiwan in a concerted drive to build track record.
The JV between Taiwan Cooperative Bank (51%) and BNP Paribas Investment Partners (49%) was officially established in June this year – the first securities investment trust company (Site) to receive regulatory approval on the island in the past seven years.
In its first month of operation the firm launched a domestic equities mutual fund, raising NT$5.7 billion ($197 million) within a five-day IPO period – the most successful local fund launch in Taiwan this year. This was facilitated by TCB’s 300-branch domestic distribution network.
The firm has just submitted an application for a new equity fund to invest in Asian emerging markets. And JV chairman Thomas Ho confirms plans to launch a more conservative fund in the first half of next year targeted at corporate investors who need to park excessive cash.
Speaking to AsianInvestor, he points out that BNP Paribas TCB still lacks sufficient track record to win institutional mandates. While he confirms plans to expand the firm’s corporate client base, largely through conservative mutual funds, he adds: “We have already seen some institutional investors buying into our first mutual fund.”
But Ho does acknowledge the difficulty of building a business in Taiwan’s highly fragmented and saturated fund management industry, which has 39 onshore securities investment trust companies and even the largest fund houses have a market share no bigger than 6%.
“Initially we planned to acquire a local Site with existing funds and track record so that we could grow AUM faster and start institutional business straight away, but we didn’t find a suitable target,” confirms Ho.
When the JV plan was first announced, AsianInvestor reported industrial practitioners’ doubts about the feasibility and profitability of starting a new Site in Taiwan.
Accordingly, Ho says he is focused on leveraging BNPP IP’s investment capabilities to develop a diversified product line covering Asian and global markets via domestic and overseas funds.
“We are not looking at fancy concepts, but rather will focus on traditional equity and fixed income funds,” he adds. “That said, we don’t rule out plans to launch innovative products in future or add new elements into traditional funds.”