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.
In recent years, Forsyth Partners had rapidly built its distribution network, which put it under a cashflow strain. It had expanded too rapidly and in something of a piecemeal fashion. For those who have done accountancy exams, one might spot the signs of a classic æovertradingÆ situation. Although there was gossip at the time, it has emerged that its problems were nothing to do with either subprime exposure or the credit crunch. ForsythÆs crunch came over an internal payment of $10 million that failed to go through, bringing matters to a halt.
Hong Kong-based Crosby Capital Partners subsequently came to the rescue. AsianInvestor spoke to Crosby COO Steve Fletcher in London about plans for the Forsyth business.
AI: Why this move into alternatives asset management?
Fletcher: Crosby is a merchant banking and asset management firm. Our core merchant banking business has a relatively volatile income stream. To offset that, weÆve been looking to develop our asset management business which has a more stable and certain income stream, and therefore we have been looking out opportunistically for acquisitions. WeÆve grown organically an Asian wealth management business and weÆve launched a single manager hedge fund in December 2006 called the Crosby Active Opportunities Fund.
Why did you pursue Forsyth as an acquisition target?
We were alerted to Forsyth through our contacts that the firm was encountering some problems and was up for sale. It became apparent to us that there was a well-recognised brand, and a group of high-quality staff with two important businesses: ratings and research, and funds of funds.
The problems Forsyth was having at the time werenÆt related to those core operations or the operational infrastructure.
What exactly did you buy and how much did you pay?
We bought the investment management contracts and the brand. We also bought some of the operating infrastructure and hired the people from Forsyth Partners Ltd and Forsyth Partners (Europe) Ltd. What we didnÆt do was buy any company because of the nature of the administrative process and the way in which the liquidity problems had hit them.
To date we havenÆt said anything about how much we paid, as it was subject to commercial confidentiality, and certain details of it still are. However, the administrator Grant Thornton, in a report to creditors, said that approximately $6.4 million was paid including assumed liabilities.
Did you hire all the staff?
We hired all of the UK-based staff, and certain of the international sales staff. We didnÆt hire everyone based outside of the UK because of the way in which the expansion had proceeded. Broadly speaking, weÆve retained the staff based in Asia. Not everyone chose to accept the contracts though.
The acquisition of a UK-based business doesnÆt lessen our commitment to Asia. In fact, weÆre actively looking to build on the Forsyth s presence in Asia and the Hong Kong, Singapore and Korea-based staff will continue to work under the Forsyth banner and brand.
What are your views and plans for that Forsyth brand?
It was a strong brand that grew organically. This wasnÆt just about buying the assets under management and wrapping it in a Crosby label. We could see value in all its businesses and we wanted to keep the brand.
I donÆt think it sustained damage through the recent events and entry into administration. Throughout the events at Forsyth and the turmoil in the markets, the funds have performed broadly in line with their peer group and, in some cases, outperformed.
All the Forsyth funds have now been unfrozen. There hasnÆt been much in the way in redemptions and weÆve been pleased with the stickiness. We moved quickly to speak to the investors with our plans for the business and unfreeze the funds as quickly as possible.
WeÆll keep expanding the Crosby asset management business and we have plans to launch new Forsyth funds of fundsÆ products. WeÆll build on that business, but weÆre not able to discuss product specifics yet.
Sunsuper and QSuper appoints CIO for combined entity; State Street appoints heads of HK and Taiwan; Nothern Trust rebuilds Apac team; Manulife IM names emerging markets fixed income CIO; RBC Wealth Management hires four into HK; Lombard Odier hires two senior equity managers; Allianz Global Investors appoints Asia hand as equity CIO; and more.
Investors from China and the US are expected to continue buying assets in each other’s markets despite the blacklist of Chinese firms with military and surveillance ties.
Stronger government actions are needed to meet the Paris Agreement goal of limiting global temperature rise to 1.5 degrees, investors such as Hesta and CDPQ signed in a statement.
AsianInvestor explains why we chose the winners of the second half of our 2021 fund manager winners, by major local markets.