Deutsche Bank has long-term plans to enter Asia's fund management distribution market by importing an open architecture it is now establishing in Europe with Amvescap's Invesco mutual fund products, according to Deutsche and Invesco officials in Hong Kong. But while Asia is covered in their global partnership, in which Deutsche will offer third-party funds for the first time, the bank has a lot of work to do before it is ready to extend its efforts here.

Consumer banks have come to dominate retail distribution of funds in Hong Kong and Singapore. Citibank and Standard Chartered together have the majority of the market in Hong, having started selling third-party funds in addition to their own since the mid-1990s, leaving HSBC playing catch-up (it has made inroads since also adopting an open platform). Deutsche Bank is not a significant retail presence when it comes to selling funds here.

"The partnership with Invesco is global but will be initiated from Europe," says Giselle Lee, head of North Asia institutional sales at Deutsche Asset Management. "In Asia we're not at that stage yet. We are also pursuing this with other fund management companies here as well, not just with Invesco."

She adds that Deutsche has had its hands full. Its asset management arm has recently absorbed Zurich Scudder Investments and is in the process of building a retail team in Hong Kong, expanding from its base in Singapore. These new hires will be the ones spearheading new distribution arrangements.

Moreover, whereas Deutsche is a newcomer to funds distribution in places such as Hong Kong, the bank dominates European distribution, where selling third-party funds remains a novelty. Edith Ngan, Invesco's director and head of marketing and institutional services in Hong Kong, says the partnership will extend to Asia once it succeeds in Deutsche's home turf.

Ngan adds this arrangement stems not just from the trend of banks selling third-party funds, which began in the United States in the mid-80s, but also from distributors beginning to organize themselves along global, not regional lines. Independent fund houses such as Anglo-American concern Amvescap are keen to forge a handful of key global partnerships with distributors rather than have a patchwork across the world. Invesco funds are currently sold through Citi, StanChart and HSBC in Hong Kong.