Exclusive: Aegon Asset Management ceases Hong Kong operations, to close Japan office by year-end

The firm will be left with Shanghai as its only presence in Asia, but sources say its joint-venture business has been performing "tremendously well".
Exclusive: Aegon Asset Management ceases Hong Kong operations, to close Japan office by year-end

Aegon Asset Management has ceased distribution activities in Asia outside of mainland China as it focuses its resources on Europe and the US.

The asset management arm of Aegon Group had wrapped up operations in Hong Kong and plans to wind down its Japan operations by the end of the year, sources familiar with the matter told AsianInvestor. A spokesperson has since clarified that both offices shut down distribution activities on Wednesday (August 31), but the Hong Kong entity will be kept active to support its mainland China business.

On the Securities and Future Commission (SFC) online registry of institutions, Aegon AM was stated to have “ceased business of regulated activities”.

The firm has removed Hong Kong and Japan from its list of locations on its website, although its fact sheet dated August 2022 continued to list both markets.

In the Hong Kong office, one employee will be retained while another has relocated to London. A further two will leave the company. In Japan, two employees are no longer with the firm, the spokesperson said without elaborating on whether there were others that had transferred to other locations.

Emails to Mabel Cho, the former regional head, bounced and a call to her office line was answered by Winfred Tsang, head of Hong Kong, who declined to comment.

One source said Cho has left the business and is relocating overseas. Her SFC accreditation to be a licensed representative to her principal is no longer active.

The spokesperson confirmed that Cho left the business earlier in the year before the decision to shutter the distribution business was made.

Client assets will continue to be managed by Aegon AM investment teams in Europe and the US, and some client servicing will be transfered to Europe-based teams.

Aegon Asset Management has been in Hong Kong since 2012. Aegon Group, which is headquartered in The Hague in the Netherlands, has €315 billion ($313.73 billion) of assets under management.

The group reported a €348 million net loss in the second quarter of the year. The asset management arm of the business reported a 55% decline in profits in the second quarter from the year before.

Under its “strategic highlights” section of the quarterly report, Aegon said that it would focus on three core markets (the United States, the Netherlands, and the United Kingdom), three growth markets (Spain & Portugal, Brazil, and China) and one global asset manager.

AsianInvestor understands that Aegon Asset Management will be retaining its Shanghai business, making it the only Asian location left.

Aegon Asset Management has been pushing forward with its China business in recent years, having first entered the market in 2008 through a joint venture. Last September, it received approval for its Shanghai-based unit to become a Qualified Domestic Limited Partner (QDLP) manager which allows it to provide its products to Chinese institutions and high-net-worth-investors.

“Their joint venture in China is doing tremendously well,” one source told AsianInvestor. “The nature of what they’re doing makes a lot of sense.”

“Joint ventures of asset management companies in China have made enormous profits over the last five years. They make annual profits even with their minority shareholdings, sometimes of 2-3 times the aggregate capital they invested to get their JV started 10 years ago,” the person said.

The insurance business in China is held through a joint venture called Aegon THTF Life Insurance, while Aegon AM owns 49% of Shanghai-based Aegon-Industrial Fund Management Company (AIFMC).

The move was the result of a “strategic review” of the business, the Aegon AM spokesperson said. “By ceasing distribution in the wider Asia market, it will free resources to invest in its core markets in Europe and the US, while broadening its fund offering via the WFOE (wholly foreign-owned enterprise) and strengthening its cooperation with AIFMC in China,” he said.

Transamerica Life Bermuda (TLB), Aegon's insurance business in Hong Kong, is unlikely to be affected by these closures, a TLB spokesperson told AsianInvestor. TLB’s investment portfolios are primarily managed by Aegon Asset Management (US), which is not connected to the firm’s Asia operations, she said.

“TLB remains open for business and via our full-service branches in Hong Kong, Singapore and Bermuda, we will continue to provide the highest level of service to our partners and high-net-worth customers in Asia and beyond,” she added.

This article has been updated with comments by Aegon AM and TLB spokespeople.

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