Swiss fund data provider Fundinfo and its sister research firm ifund services are expanding in Asia, with the former looking to build out beyond Hong Kong and Singapore and the latter eyeing its first regional presence.
Fundinfo provides data – such as on performance, flows and investment teams – to distributors and asset owners through an online platform free of charge. It competes with the likes of Mercer and Morningstar, but unlike those two firms, Fundinfo makes money by charging asset managers to upload data to its platform, instead of charging distributors for accessing it.
The company said it worked with almost all banks, both international and local, in Hong Kong and Singapore, where it has offices, and next it plans to focus on those in China and Taiwan.
Fundinfo is in advanced talks with a Chinese partner about setting up a joint venture to tap the mainland market and may unveil the deal next month, said Philipp Portmann, Hong Kong-based partner.
The JV will allow it to source mainland fund data and market it to Chinese distributors. Portmann declined to name the partner but said it was an influential firm and would motivate local asset managers to participate.
“We already cover all funds under the [Hong Kong-China] mutual recognition of funds scheme, both southbound and northbound,” noted Portmann. “The next step is to expand into local products in China.
“We need a powerful ambassador in China to make the local fund house willing to contribute to our data base,” he said. “If we go direct, the interest to work together is limited. If we tell them we work with big international firms, these firms are still nobody in China.”
After China, Taiwan will be next.
Meanwhile, ifund services is considering putting a permanent presence in Asia instead of covering it out of Zurich. Matthias Weber, the firm's partner and chief investment officer, said it was still contemplating the best way to pursue this plan in the region.
Weber (pictured left) is in Asia to promote automated fund selection following the launch of its new service, Digital-Advisor, in Europe in the second half of this year. It has gained 15 clients, including Dutch bank ING, a German robo-adviser and some local banks in Switzerland.
Zurich-based Weber was in Singapore earlier this month to meet fund distributors including Standard Chartered, OCBC and Maybank, and he was in Hong Kong when AsianInvestor spoke to him yesterday.
Digital-Advisor automates selection based on quantitative and qualitative factors. It automatically scores funds based on performance, company profile, manager quality and other indicators using its database. The service can also select products based on distributor’s house views.
“We need more information that is predictive of future performance, so we look at indicators such as fund characteristics,” noted Weber. For instance, he said, some academic papers on mutual funds suggest that privately owned investment firms outperform listed ones.
Weber said fund selectors react to Digital-Advisor in two ways: they are interested because it provides a different perspective on what they do daily, or they are worried they will be replaced. Fund analysts may see this as competition, he noted, but senior managers realise it works.
The company sees opportunities for the tool in Asia, not only among banks and wealth managers, but also from robo-advisers looking to expand their platforms to include actively managed funds.