Goldman launches Asia fund development drive
Goldman Sachs Asset Management has hired its first head of product development for Asia-Pacific in a drive to tailor its offering to institutional investors and fund distributors in the region.
The firm, which had $93 billion in Asia-sourced assets at end-2011 (13% of its global figure), has re-hired Masaki Taniguchi to fill the role, having hunted for a candidate for quite some time.
Taniguchi started last week in Hong Kong and is, in fact, returning to GSAM after a decade with Sparx. He undertook strategic planning, product development and institutional marketing when he worked for GSAM in the late 1990s and early 2000s in Tokyo.
He is now tasked with identifying and building product capabilities across the Asia-Pacific region and working with clients in Asia ex-Japan to identify potential areas of interaction in a multi-strategy approach.
Over time he is expected to build a regional product development team, depending on the environment and opportunities, confirms Oliver Bolitho, head of GSAM in Asia. “This is an additional investment in the build-out of our client-facing capabilities,” he says of Taniguchi’s hire.
Historically GSAM has had product development capabilities in Japan and Korea overseen by a team in London. The idea now is to focus more explicitly on servicing the needs of Asian clients, both institutional investors and distributors (private bank and commercial banks).
“What we are finding is that Asian demand and European demand are different,” says Bolitho. “The willingness and ability to identify, size and build products for Asia was not being serviced in the way that it could be.”
While the majority of portfolios in the US and Europe are built on domestic asset class exposure plus regional diversification, he says the pace of saving and appetite for investment opportunities in Asia is such that it requires a different approach of diversification through strategies.
In the past GSAM has treated product development in Japan as a separate market from Asia, but Bolitho acknowledges there is more common ground on investor appetites than first thought.
“The identification and launching of products for Asian clients in an Asian time horizon with Asia-relevant structures has proven important,” he stresses, noting that GSAM is increasingly focused on private and commercial banks as distributors of local products for local investors.
He suggests that since 2007 GSAM has been seeking to transition from being an importer of globally manufactured products for local investors, both institutional and retail, to building domestic equity and fixed income capabilities in India, Korea, Japan, China and Australia.
“The relevance of the products we have in our suite increases for a domestic audience,” adds Bolitho. “That therefore allows you to invest in the more retail distribution approaches, which were historically not part of what we did.
“We have done a very limited amount of business with the private banking channel in the region, principally because the products GSAM made and imported were less relevant to the needs of the private bank than they could have been.”
Taniguchi will seek to provide tailored solutions rather than pre-designed product to institutional investors and fund distributors.
Bolitho confirms GSAM is working to establish relationships with distributors, with a preference for a group of preferred global partners when it comes to the top end of the wealth spectrum. “It is in our economic interest and probably theirs to invest more in those relationships than we might in a niche local market,” he adds.
At the same time Bolitho acknowledges that there are a number of distributors whose domestic scale also warrants attention, specifically naming the broker-dealer community in Japan.
In terms of Asian investor appetite, Bolitho points to the biggest themes this year as corporate bonds and income-yielding products.
Looking ahead, he says GSAM is having more conversations about managed volatility strategies in equities, “where the ability to capture the yield of an income portfolio, plus potential upside of the equity market, is starting to look attractive to some. That has been particularly true in Japan.”
On other themes of interest he points to inflation hedging, with commodity discussions going on around the region and real estate back on the agenda.
Taniguchi had worked at Sparx for 10 years, most recently as COO of Sparx Group. He has also been president and director of Sparx Asia Investment Advisors (Hong Kong) and director and COO of Sparx Asset Management (Tokyo), based in Hong Kong.
He left the alternatives firm at the end of March this year. AsianInvestor understands he has not been replaced.