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.
Jayant Rikhye has been promoted to head of HSBC securities services for the Middle East and North Africa. He was previously deputy global head of institutional fund services and head of institutional fund services Asia-Pacific, based in Hong Kong.
The Middle East markets collectively boast a capitalisation of around $1 trillion. Not surprisingly they are attracting rising investor numbers, thanks to easy access to liquidity and the regionÆs own overflowing wealth and inward investment.
HSBC says its assets in the region have grown three times from December 2006 to December 2007 and a further 26% in the first five months of this year; a trend seen in almost all countries in the region apart from Egypt.
ôThe Middle East region is awash with liquidity at the moment. A number of jurisdictions in the region are now looking to become regional fund centres and are offering new incentives for fund managers to set up local funds,ö says Rikhye.
ôOur goal is to develop the fund services business in the Middle East over the next 18 months and gain an early mover advantage. At the same time, a number of fund managers are looking to emerging markets as a means to diversify their portfolios and invest a larger portion in regions such as the Middle East and Asia," he adds.
These markets have traditionally been under served from a sub-custody perspective, with HSBC ruling roost as the only sub-custodian offering services throughout this region. This, however, is about to change with rival Standard Chartered announcing plans to provide sub-custodial services in the Dubai Financial Market later this year.
HSBC, however, says it plans to offer global custody to cross border funds in some emerging markets.
ôWe have been offering global custody services to clients in Asia for several years,ö explains Andrew Long, head of global transaction banking at the bank. ôWe will continue to build on this by tapping into the huge personal savings ratios within our key markets in the region, as we see our Asian funds clients increasingly moving into Asian regional investment strategies as well as into OECD-type investments.ö
Lilian Wong now replaces Rikhye as head of fund services Asia-Pacific, based in Hong Kong. She was previously head of alternative fund services in the region.
The new appointments demonstrate further merging of the institutional fund services and alternative fund services divisions, the bank says. As of December 2007, HSBC securities services had global assets under custody of $6 trillion and global assets under administration of $1.4 trillion.
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