WestAM, the asset management arm of WestLB, Germany's largest landesbank (regional bank), with $40 billion under management, has begun marketing to institutional investors in North Asia.
Rupert Rucker, director and head of new business development and client servicing for Asia ex-Japan, has been pounding the pavement from his new base in Hong Kong. He says the firm has a 10-year plan for breaking into asset management in the region, starting by leveraging contacts from WestLB, which has had a presence in markets such as Hong Kong for decades.
"Cold calling doesn't work in Asia," Rucker says. "I've tried it. The prospect will give you a meeting but you know you're not getting anywhere. You have to have someone provide an introduction." That's the role of WestLB.
WestAM has provided fund management for German institutions since the 1960s but six years ago went global, with the realization that it had to provide a global expertise to its German clients. It hired Richard Wohanka, an expert at helping European banks internationalize their fund management. Wohanka had also set up the international fund businesses for Paribas and Barings; today he's doing the same for Fortis.
Under Wohanka's guidance, WestAM set about acquiring global centres of excellence. "We acquired teams for their investment process, not their assets," says Rucker. For example, the firm acquired specialist teams in cities such as Chicago, Houston, London, Sydney and Tokyo. "That process was finished by 1999; now the idea is to cross-sell," Rucker explains.
The firm has built a sales effort in regions where it seemed viable. In Tokyo and Sydney, for example, WestAM felt it could provide a local competence, as well as leverage the bank's corporate connections. Now it's turned its attention to Northeast Asia.
"We're new here," Rucker says. "We don't expect to simply walk in and get on top of consultants' buy lists." Rather over the next three years, he will concentrate on pitching WestLB clients. The bank has branches in Beijing, Seoul, Shanghai and Taipei. It also has a presence in Singapore but WestAM doesn't think it can justify the costs Singapore requires of establishing a fund management team to market there. For now the effort is just Rucker, and a few agents in Northeast Asia that are meant to open doors but are not WestLB or WestAM employees.
He reckons throughout Northeast Asia there are 20 prospective clients, in addition to the three WestAM's notched up, including small- to mid-sized banks and investment companies that often have at least $500 million of assets offshore and don't know what to do with them.
"We see competitors selling short-term, high-margin products like equity-linked guaranteed products," Rucker says. "That's not what institutions need. We favour low-risk, steady return products."
The firm has also begun visiting investment consultants and using its existing relationship with them in the US and the UK, with a longer-term view of access to a wider institutional audience.