In moves to strengthen its asset-management business in Asia, La Compagnie Financière Edmond de Rothchild (EdR) has hired three former Société Générale Asset Management (SGAM) executives and increased its stake in Shanghai-based Zhonghai Fund Management to 25%.
Denis Lefranc joined the French bank on April 1 as deputy Asia chief executive, having been Asia-Pacific CEO of SGAM since May 2008. Lefranc also served as executive vice-president at joint venture Fortune Société Générale Fund Management in Shanghai from 2003 to 2008.
He will work with two former SGAM colleagues – Anson Tay, Asia chief marketing officer, and Douglas Hsu, head of sales for Taiwan – who joined EdR last month. Tay was previously Asia Pacific ex-Japan chief operating officer and head of Singapore at SGAM, while Hsu had been head of marketing and commercial development for Taiwan.
The trio worked for SGAM until it finalised the implementation of its merger with Crédit Agricole Asset Management at the end of last year to form Amundi Asset Management.
The Hong Kong-based team will be responsible for marketing EdR’s asset-management offering across Asia, with a particular focus on China, Singapore and Taiwan.
Moreover, by increasing its Zhonghai stake from 15.4% to 25%, EdR aims to bring its product innovation expertise and experience of international markets to Zhonghai to help the Chinese firm launch qualified domestic institutional investor (QDII) funds and strengthen its institutional business.
At the end of December, Zhonghai's AUM was Rmb25.4 billion ($3.88 billion), including Rmb23.9 billion from nine balanced, equity and bond mutual funds. It launched a yield-enhanced fixed-income fund last month and a consumer-sector-themed equity fund is awaiting approval from the China Securities Regulatory Commission.
Zhonghai submitted its application for a QDII licence at the end of 2007. While there is no concrete time line for obtaining approval, says Lefranc, the bank is optimistic and ready to transform its technology and develop the right QDII product.
EdR’s representative office in Shanghai will also work closely with the joint venture to further develop its institutional business in China, such as corporate treasury and insurance companies, he adds. Zhonghai obtained its segregated-account licence in 2008.
Lefranc notes that 30% of Zhonghai’s AUM is sourced from institutional clients, which is currently only invested in the domestic market. When Zhonghai obtains its QDII licence, it will be able to provide international asset management solutions.
In addition, EdR intends to work with Zhonghai to develop a qualified foreign institutional investor (QFII) advisory business. Lefranc says the idea is to have its Hong Kong-based regional sales team and Shanghai representative office to cooperate with Zhonghai to push global sales efforts in China.
Meanwhile, in Taiwan, EdR is looking to establish an investment advisory business and develop closer relationships with insurance companies with a view to winning more mandates, says Lefranc. That is in addition to selling its offshore mutual funds through its master agent to local retail investors, he adds.
He adds that the bank does not yet have a physical presence in Singapore, but will leverage its sales capability in Hong Kong to develop its private banking business in the Lion City.