Similar to the Fitch credit rating scale, Fitch AMR assigns ratings to asset management organizations (AMOs). The rating methodology, intrinsic rating and performance rating, assesses the level of security an asset manager can provide to an institutional investor and evaluates the added value an asset manager can provide to an institutional investor respectively. The former focuses on structure, independence, communication, and risk management; the latter looks closely at the investment team, investment process, technical resources, performance, and associated risks.
We decided to launch the product in Singapore and Hong Kong because there is a need for increased transparency among AMOs, said Vivek Goyal, head of Fitch Singapore.
Fitch AMR expects demand for intrinsic ratings in Asia to come from AMOs who manage funds on behalf of governments and are interested in an unbiased evaluation of their organization.
According to Goyal, Fitch AMR provides AMOs with two types of reports: a rating synopsis with assessments for each section of criteria which would be widely available from normal media channel, as well as a extensive rating report that contains comments and ratings for each analyzed criteria. The latter will be confidential and used by the rated AMOs to review their risk and control systems.