Goldman Sachs Asset Management has signed an exclusive partnership with Kuala Lumpur-based RHB Investment Management to jointly develop fund products for investors in Malaysia.
The partnership agreement is the first of its kind in the country and will significantly enhance the range of investment products and asset classes available to RHB’s customers, say the two firms.
RHB IM is part of the RHB Banking Group, Malaysia’s fourth biggest financial services group, and has 25 funds with assets under management totalling M$12.3 billion as of October 31.
Under the partnership, RHB IM and GSAM will share their knowledge of global and local capital markets, product development and client servicing, and will develop joint marketing initiatives.
The deal will boost GSAM’s presence in Malaysia, providing it with an established distribution network. The US firm already has a number of institutional clients and a conventional (non-sharia) fund-management licence in the country.
GSAM will work with RHB IM to develop funds for both RHB’s institutional and retail businesses. Oliver Bolitho, Asia head of GSAM, expects the partnership to be focused more on developing retail funds for distribution through RHB’s platform initially, with more of a balance emerging between institutional and retail as time goes by.
GSAM is not restricted only to distributing via RHB; there are certain clauses that will allow relationships with other firms. “But you won’t find us distributing through third parties in the next few months,” says Bolitho, noting that the current focus is on the new partnership.
RHB is one of the pre-eminent distributors of sharia funds, he adds, which will be useful for GSAM, which only has a conventional fund-management licence, not an Islamic one. It obtained the licence in late July, becoming the sixth foreign firm to obtain such approval in Malaysia.
Since obtaining its licence in July, GSAM has built up its team on the ground, including sales, investment and compliance staff. More will be put in place as the business develops on either the investment or client support side, as required.
For RHB’s part, the collaboration “removes the need for RHB to scour the market for capabilities that may be relevant tomorrow”, says Bolitho, “because they have access to a broad platform to help build products that are right for the market”.
Sharifatul Hanizah Said Ali, managing director of RHB IM, says: “We are delighted to be partnering with Goldman Sachs Asset Management and delivering their significant expertise exclusively to Malaysian investors.”
Bolitho says Asian institutional investors are particularly interested in areas such as emerging-market equities, emerging-market debt and other capabilities that generate yield (the latter particularly from the viewpoint of ageing populations and particularly in Northeast Asia).
GSAM may also develop products using RHB IM’s capabilities for distribution outside Malaysia. Given RHB’s expertise in the sharia space, says Bolitho, GSAM may work with them on products that it can then sell through its franchises in the Middle East and other Asian countries with Muslim populations.
Looking ahead, Bolitho sees the next Asian market for further development as India, where it has a licence and has had an investment team on the ground since end-2006. GSAM has been looking at that market for several years, during which time the Securities and Exchange Board of India has made several big changes to the regulatory landscape.