The incoming chief executive of Eastspring Investments, Guy Strapp, has ambitious growth plans for Prudential Asia’s $95 billion asset management arm, telling AsianInvestor the firm is eying opportunities in global emerging markets and EM debt.
These initiatives come as the firm sees a number of personnel changes, including the departure of institutional sales heads Paul Hancock in London and Dean Winterton in Singapore, as well as current CEO Graham Mason, who is stepping down and relocating to South Africa.
Set to switch from Eastspring CIO to CEO on August 1, Strapp notes that Eastspring has been running internal money in global emerging markets and emerging market debt products, and may eventually look to bring these to market, although he declines to elaborate.
While more traditional Asian markets such as China continue to offer opportunities for long-term investors, there are compelling stories in Southeast Asia as well, Strapp says, singling out the Philippines and Indonesia in particular.
Previously subject to boom and busts, these economies are now more consistent, with many local corporations boasting stronger balance sheets compared with Western counterparts, he adds.
With some investors voicing concerns over aging populations in Asia, particularly for China, Strapp argues that the long-term growth story for US and European pensions and other institutions remains appealing.
And he stresses that expanding its distribution capabilities outside of Asia is a priority for the firm. Some 95% of its AUM comes from Asian institutions, but Strapp notes that the region's long-term growth story is resonating with US and European pensions and institutional investors, particularly now amid the ongoing search for returns in the low-yield environment.
“We have a local expertise. That’s our bread and butter. But we are interested in the US and Europe, we see them as a natural extension to what we do,” Strapp says. “The attributes for either US or European domiciled investors is the diversification they get from investing in Asia.”
He notes how the company’s offices in Chicago and Luxembourg are for distribution only, adding that Eastspring will “leverage the investment expertise from its hub in Singapore for offshore clients”.
Still, he has some rebuilding to do. Hancock, who moved from Hong Kong to London in mid-2011 to establish Eastspring’s UK and European institutional sales business, is set to retire mid-July.
Eastspring says it is in negotiations with a replacement and expects to make an announcement before the end of this month. Hancock was involved in the interviewing process, adds Strapp.
Hancock had been regional head of institutional sales at Prudential’s funds arm in Hong Kong for three years before the move to London. Before joining Prudential in 2005, he was group director of business development at HSBC in New York.
But Winterton, who was hired to replace Hancock to head institutional sales in Asia, left late in May to join Australian asset manager Perpetual as general manager of distribution.
Now Eastspring's search for Winterton’s replacement is underway. He had spent almost two years at the firm, joining in July 2011 from AMP Capital.
Meanwhile, chief executive Mason is stepping down to take a less active role as executive vice-chairman. He will continue to work on a part-time basis from Cape Town, and still be involved in the firm’s investment decisions for its joint venture companies in India, China and Hong Kong.
Mason will also continue to serve on the respective boards, and remain chairman of Eastspring Investments, Singapore. Strapp and Mason’s new roles are effective August 1.
Strapp has been with Eastspring since 2007, most recently as chief investment officer, and was instrumental in helping the asset management arm of Prudential Asia go through its re-branding process in late 2011.
Eastspring has investment and distribution offices in Japan, Malaysia, Singapore, South Korea, Taiwan, Hong Kong, the United Arab Emirates, Vietnam and most recently Indonesia, as well as the joint venture operations in India, China and Hong Kong.