The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Eurizon Capital, which is fully owned by Italian banking group Intesa Sanpaolo, established its first Asian branch in Singapore in September 2006. The branch was granted a capital markets services license by the Monetary Authority of Singapore (MAS) in April 2007.
Eurizon Capital has named Phillip Securities as the distributor of its 20 funds, which will sold to accredited investors in Singapore. An accredited investor is classified by the MAS as an individual whose net personal assets exceed S$2 million or with an income in the preceding 12 months of not less than S$300,000.
ôWe are observing in Singapore and in the region a steady growth in the demand of foreign mutual funds, driven by investorsÆ need for geographical diversification of their portfolios,ö says Ciro Beffi, Luxembourg-based general manager of Eurizon Capital.
Guido Imbimbo, head of Eurizon CapitalÆs Singapore branch, says the home bias among Asian investors is no longer as strong as it was before.
ôThe bias for the local market and in the local currency is changing very quickly in many countries in Asia,ö says Imbimbo. ôMany local fund management companies donÆt have huge experience when it comes to global or European investments. ThatÆs our segment, thatÆs where we can help.ö
The Eurizon Capital funds now offered in Singapore belong to an umbrella fund governed by Luxembourg law and are Ucits-3 compliant. They include several equity subfunds focused on individual markets and global sectors such as European equities, Italian equities, European small caps, global emerging market equities, energy and materials, banks, European fixed income and emerging-market debt.
The funds will be registered in classes denominated in euro and in US dollars. Eurizon Capital funds include a class of funds that hedge the foreign exchange exposure between the currency of the underlying asset and the euro.
ôThe launch of our funds in Singapore allows us to implement our entry strategy in one of the largest markets for asset management business in Asia,ö says Beffi.
That entry strategy is penetrating Asian markets by building distribution networks.
ôWe use Singapore as a platform to develop our distribution activity in Asia,ö says Imbimbo.
Eurizon CapitalÆs targets in Singapore and the rest of Asia are mainly retail investors and high net worth individuals. Outside Singapore, high on the list of the companyÆs business development for now are the markets in Taiwan, China, and South Korea. Markets in Malaysia, Thailand, Japan, India and Australia are also targets, but any push there will likely come later.
In May, Eurizon Capital announced the launch of a Luxembourg-domiciled total return fund investing in Asian equities ex-Japan sub-managed by the Singapore-based Fullerton Fund Management, a wholly-owned subsidiary of Singapore state investment management company Temasek Holdings.
Earlier in April, Eurizon Capital appointed Galaxy Securities as its master agent for distribution of a selection of its mutual funds in Taiwan. Five Eurizon Capital funds have been approved for distribution in Taiwan, and they will be launched next week. The company expects to seek approval for the distribution of six more funds there.
ôIn Taiwan, there is demand from middle-class retail investors who are looking to diversify their financial investments into overseas markets,ö Imbimbo says, adding the same trend is present in South Korea and China.
Also in April, Intessa Sanpaolo announced its acquisition of 49% stake of Penghua Fund Management. Previously, the bank announced the purchase of 19.9% stake of Union Life, an insurance company ranked among the top ten in China.
Pierre Bouchoms, co-general manager of Eurizon Capital, who was previously based in Luxembourg but based in Shenzhen for now, says the fund management joint venture in China expects to file an application before the mainlandÆs regulator to become a qualified domestic institutional investor (QDII) issuer, as well as an application for its first QDII product.
ôThe QDII business in China will be the next big story for us,ö Imbimbo says.
Although thereÆs no telling when the joint venture will get the approvals from the regulator, Bouchoms says he hopes the QDII product could be launched by mid-2008. He expects to get a quota in line with recent approvals of between $5-$6 billion.
While Eurizon offers a full range of investments and products, Imbimbo says the company will be offering more equity funds in Asia for now because thatÆs where the higher demand lies. Only four of the companyÆs 20 funds in Singapore are bond funds, and only one of its five funds in Taiwan is a bond fund.
Eurizon Capital, which has a 30% share of the Italian funds market, is the latest major player from Europe to try and penetrate AsiaÆs fast-growing market. Robeco, which has a 25% of the Dutch funds market, recently announced a major push into the region.
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