Fortis Investments outlines ABN Amro Asia buy
Richard Wohanka, CEO of Fortis Investments, details the new structure and ambitions in Asia following the firmÆs acquisition of ABN Amro Asset Management.
ôWe have, by this transaction, pushed the fast-forward button by three years to achieve our strategic goals for Asia,ö says Richard Wohanka, global CEO of Fortis Investments, which has acquired the asset-management and private-banking businesses of ABN Amro.
In June last year, Wohanka outlined FortisÆs ambitions in Asia to AsianInvestor. These included pursuing three streams of business: selling global funds to Asia, selling Asia product to global investors, and manufacturing onshore product for local investors.
Fortis InvestmentsÆ Asia operations only went live in 2004, and its early years involved creating local-currency products for onshore clients in Japan and Indonesia, as well as forging a joint venture in China, Fortis Haitong Fund Management. India and Korea remained areas of interest.
From a European to a global firm
In a recent interview with AsianInvestor he makes plain the newly integrated company is meant to further Fortis InvestmentsÆ original goals, which include ensuring Asia comprises 25%-30% of both staff and revenue by 2010. The deal has immediately brought the firm close to that mark (25% of staff and 23% of revenues in the combined entity now come from Asia including Japan).
ôGiven the growth rate in Asia, I expect the region to overtake Europe as the biggest contributor to our business by 2010 or 2011,ö he says. The combined entity now sources around Ç20 billion ($30.1 billion) from Asia-Pacific.
The ABN Amro deal will involve cost synergies in Europe, where the two groups have many duplications, but not in Asia or the Americas. As a result, Asia now plays a bigger role in the combined business than it did in the individual ones. ôBoth Fortis and ABN Amro were Eurocentric businesses but this has changed completely,ö Wohanka adds.
The combined firm will be called Fortis Investments but for certain countries or businesses, such as the Taiwan market, will retain the ABN Amro brand for a while. But in some places the name can be scrapped, such as India, where the affiliation with a bank was counterproductive when it came to getting on other consumer banksÆ shelves.
No decision has been made regarding Fortis Haitong and the inherited ABN Amro Teda fund joint ventures in China. They could be merged, one could be sold, or another solution found. Any decision will involve the JV partners and the mainland regulators. ôBut we wonÆt touch either brand,ö Wohanka says.
Distribution
Distribution in Asia, unlike in Europe, should not be affected much. Fortis Insurance has long been an important channel for Fortis Investments, and now it will have the ABN Amro product suite to market as well; ABN Amro didnÆt have an insurance affiliate. Similarly, Fortis Group bought ABN AmroÆs private bank and will integrate this into Fortis GroupÆ private bank, so both will continue to provide funds from both sides.
Retail bank distribution is a little trickier: ABN AmroÆs consumer banks in Indonesia and India will go to RBS, which along with Fortis and Bank Santander comprised the trio of institutions that have carved up ABN Amro Group.
Fortis is now negotiating a distribution deal with RBS in the hope it can retain these channels along similar pricing lines. RBS does not have an affiliated fund-management company so Wohanka expects the relationship will be maintained.
Regional executives and teams
Functionally, the Asia region (including Japan, Australia and the Middle East) will be headed by Stewart Edgar, who is technically based in Europe but will spend most of his time in Asia. Asian operations will be based out of Hong Kong, and the region will have its own functional chiefs in areas such as investment management, business development and operations.
Alex Ng, the former Asia CIO at ABN Amro, will serve as deputy head of investment for each locality in the region. He will also serve as CEO of the Hong Kong hub, responsible for Singapore, Taiwan, Korea and the China rep office.
Mark te Riele, who had served as MD for Fortis InvestmentÆs pre-acquisition Asia business, has been named EdgarÆs deputy head of new business development for the region as well as head of distribution partners.
Henk Ruitenberg, another ABN Amro veteran, has been named head of institutional clients for Asia-Pacific and regional head of marketing. Compliance, legal and risk management for the region falls under Andrew Turner.
Wohanka notes both Fortis and ABN Amro had a geographic/functional matrix for management so integrating the two teams has been relatively straightforward. There have been areas of overlap, however, for certain investment teams. Some had to go, a decision finalised in January.
ABN AmroÆs existing investment teams in Asian fixed income and Australian and Indian equities remain û areas where Fortis never had a business. But there was overlap in other asset classes: Fortis retains its teams for Japan equities and pan-Asia equities, while it kept ABN AmroÆs teams for China, Hong Kong, India and Australia equities. In these areas the other sideÆs team has been disbanded.
There was never much overlap in sales and marketing, however, and the business growth is such that every hand is required. The exception is for Arne Lindman, ABN Amro Asset ManagementÆs CEO for Asia, who will leave the company when the two entities are legally merged at the end of March.
On the agenda
The final change involves operations, where the firms had different philosophies. ABN Amro outsourced its middle office to State Street. Fortis prefers to do things in-house, including IT-related matters. Fortis wants to create an IT and operations hub for Asia (which is a change for the firm, which previously had everything centralised in Europe).
A year ago Fortis wanted to build businesses onshore in Korea and India. The ABN Amro acquisition has delivered a healthy India operation. ôNow we have the geographical spread we wanted except for Korea,ö Wohanka says. ôAnd we want to be prominent, not number 15.ö
In June last year, Wohanka outlined FortisÆs ambitions in Asia to AsianInvestor. These included pursuing three streams of business: selling global funds to Asia, selling Asia product to global investors, and manufacturing onshore product for local investors.
Fortis InvestmentsÆ Asia operations only went live in 2004, and its early years involved creating local-currency products for onshore clients in Japan and Indonesia, as well as forging a joint venture in China, Fortis Haitong Fund Management. India and Korea remained areas of interest.
From a European to a global firm
In a recent interview with AsianInvestor he makes plain the newly integrated company is meant to further Fortis InvestmentsÆ original goals, which include ensuring Asia comprises 25%-30% of both staff and revenue by 2010. The deal has immediately brought the firm close to that mark (25% of staff and 23% of revenues in the combined entity now come from Asia including Japan).
ôGiven the growth rate in Asia, I expect the region to overtake Europe as the biggest contributor to our business by 2010 or 2011,ö he says. The combined entity now sources around Ç20 billion ($30.1 billion) from Asia-Pacific.
The ABN Amro deal will involve cost synergies in Europe, where the two groups have many duplications, but not in Asia or the Americas. As a result, Asia now plays a bigger role in the combined business than it did in the individual ones. ôBoth Fortis and ABN Amro were Eurocentric businesses but this has changed completely,ö Wohanka adds.
The combined firm will be called Fortis Investments but for certain countries or businesses, such as the Taiwan market, will retain the ABN Amro brand for a while. But in some places the name can be scrapped, such as India, where the affiliation with a bank was counterproductive when it came to getting on other consumer banksÆ shelves.
No decision has been made regarding Fortis Haitong and the inherited ABN Amro Teda fund joint ventures in China. They could be merged, one could be sold, or another solution found. Any decision will involve the JV partners and the mainland regulators. ôBut we wonÆt touch either brand,ö Wohanka says.
Distribution
Distribution in Asia, unlike in Europe, should not be affected much. Fortis Insurance has long been an important channel for Fortis Investments, and now it will have the ABN Amro product suite to market as well; ABN Amro didnÆt have an insurance affiliate. Similarly, Fortis Group bought ABN AmroÆs private bank and will integrate this into Fortis GroupÆ private bank, so both will continue to provide funds from both sides.
Retail bank distribution is a little trickier: ABN AmroÆs consumer banks in Indonesia and India will go to RBS, which along with Fortis and Bank Santander comprised the trio of institutions that have carved up ABN Amro Group.
Fortis is now negotiating a distribution deal with RBS in the hope it can retain these channels along similar pricing lines. RBS does not have an affiliated fund-management company so Wohanka expects the relationship will be maintained.
Regional executives and teams
Functionally, the Asia region (including Japan, Australia and the Middle East) will be headed by Stewart Edgar, who is technically based in Europe but will spend most of his time in Asia. Asian operations will be based out of Hong Kong, and the region will have its own functional chiefs in areas such as investment management, business development and operations.
Alex Ng, the former Asia CIO at ABN Amro, will serve as deputy head of investment for each locality in the region. He will also serve as CEO of the Hong Kong hub, responsible for Singapore, Taiwan, Korea and the China rep office.
Mark te Riele, who had served as MD for Fortis InvestmentÆs pre-acquisition Asia business, has been named EdgarÆs deputy head of new business development for the region as well as head of distribution partners.
Henk Ruitenberg, another ABN Amro veteran, has been named head of institutional clients for Asia-Pacific and regional head of marketing. Compliance, legal and risk management for the region falls under Andrew Turner.
Wohanka notes both Fortis and ABN Amro had a geographic/functional matrix for management so integrating the two teams has been relatively straightforward. There have been areas of overlap, however, for certain investment teams. Some had to go, a decision finalised in January.
ABN AmroÆs existing investment teams in Asian fixed income and Australian and Indian equities remain û areas where Fortis never had a business. But there was overlap in other asset classes: Fortis retains its teams for Japan equities and pan-Asia equities, while it kept ABN AmroÆs teams for China, Hong Kong, India and Australia equities. In these areas the other sideÆs team has been disbanded.
There was never much overlap in sales and marketing, however, and the business growth is such that every hand is required. The exception is for Arne Lindman, ABN Amro Asset ManagementÆs CEO for Asia, who will leave the company when the two entities are legally merged at the end of March.
On the agenda
The final change involves operations, where the firms had different philosophies. ABN Amro outsourced its middle office to State Street. Fortis prefers to do things in-house, including IT-related matters. Fortis wants to create an IT and operations hub for Asia (which is a change for the firm, which previously had everything centralised in Europe).
A year ago Fortis wanted to build businesses onshore in Korea and India. The ABN Amro acquisition has delivered a healthy India operation. ôNow we have the geographical spread we wanted except for Korea,ö Wohanka says. ôAnd we want to be prominent, not number 15.ö
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