MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
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.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
Insto roundup: GPIF staff say J-Reits more attractive than traditional assets; Hong Kong's strict Spac criteria
EISS Super hit by another scandal; China's CSRC launches consultation on disclosure requirements for new BSE securities; Hong Kong issues consultation paper on Spacs; New World Development partners with China Taiping to focus on Greater Bay Area projects; GPIF employees say Japanese Reits have grown more attractive; Taiwan's BLF invites bid for $1.7 billion mandate; and more
SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.