Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
In his newly created role, Choy "will be working closely with the senior management team to reinforce our strategy and extend FullertonÆs regional footprint", says Lee. That team also includes chief investment officer Chan Chia Lin and chief operating officer Wah Geok Sum.
Choy was previously the regional head of sales and distribution at Prudential Asset Management, where he helped expand the companyÆs retail and private banking channels and built an institutional client base. Before that, he was the CEO of Deutsche Asset Management in Asia ex-Japan.
Fullerton was set up as the in-house fund management division of Singapore state investment company Temasek Holdings in 1989. The company was spun off into a separate business unit in 2003, but continues to manage part of TemasekÆs $108 billion global portfolio.
Now, it is aggressively pursuing the growth of its business, particularly in the area of third-party fund management.
"We have spent the last couple of years resourcing and strengthening our infrastructure to compete with the key players," Lee says.
Lee expects demand for Asian investments managed by people on the ground to strengthen, and thatÆs where he expects Fullerton to position itself.
At present, Fullerton manages around $2.4 billion in third-party funds. That excludes the amount the company manages for Temasek, which Lee wouldnÆt disclose, only to say that itÆs bigger than the companyÆs total assets for third-party funds.
FullertonÆs priority at the moment is to increase the third-party fund assets it manages to $25 billion over the next 10 years, Lee says.
Fullerton, which has a business development team of 11, has been actively marketing itself as a third-party fund manager in North Asia, Europe, North America and Australia. Lee expects to also tap the Middle East, China and India.
Most of FullertonÆs clients are based outside Singapore. Most of its assets under management come from North Asia and some are from Europe. Lee expects new business to come from North America, the Middle East and Australia ôin the next year or soö.
Around half of FullertonÆs total assets under management is invested in traditional mandates, including funds managed relative to an index. One quarter of the assets is managed on an absolute returns basis in equities and bonds and the other quarter is in funds of hedge funds.
FullertonÆs equities portfolios invest across Asia, including the emerging markets of China, Vietnam and Pakistan. Its equity fund managers in Singapore are supported by two joint venture companies in India and Pakistan as well as two representative offices in China and Vietnam. Its fixed income, currency, strategic or tactical allocation and fund of hedge fund portfolios invest in Asia and in other markets worldwide.
"The real strength of Fullerton is that it is indigenously Asian," Lee says. "Except for a Dutch person on the staff, all other staff are from Asia, with the ability to speak most of the Asian business languages. As the Asian capital markets grow, the need for local knowledge and expertise will become more apparent. We are already seeing this in China and Vietnam."
Despite its relatively small size in terms of assets under management, FullertonÆs structure is similar to that of a bigger institutional firm. The company has around 80 staff, including 30 fund managers.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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