Asia's layered introduction to multi-manager funds has taken another leap forward with the formation of the region's newest product by India's ICICI Bank and Russell Investment Group. The region's latest multi-manager fund is targeted towards ICICI's client base of Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO's) and will be offered through its branch in Singapore.
In addition to taking care of the distribution, ICICI Bank will maintain responsibility for the risk profiling and needs analysis of clients, processing the orders and ongoing client servicing. Russell will select investment managers as well as monitor and manages the portfolio.
The majority of multi-manager funds already operating in Asia focus their attention on high net worth individuals, whereas the ICICI Bank-Russell alliance will target the roughly 20 million eligible NRI's worldwide. The bank currently has a NRI base of aproximately 300,000 clients across the globe and the alliance's launch follows a two-year drive to provide investment products to the segment.
Presently, the bank offers an array of investment products to NRIs, including unit-linked notes to foreign exchange and commodities, bonds, and mutual funds, among others. According to Bhargav Dasgupta, senior general manager and head of international banking at ICICI Bank, the bank wanted to build out the typical assets of its NRI clients and believes Russell shares the same philosophy.
"We've always wanted to provide a core investment product to NRI clients and managed funds are clearly the way to go," says Dasgupta. "The partnership with Russell provides us with an opportunity to address the needs of our high net worth clients and deliver a world class investment solution used by some of the world's largest institutional investors."
As current regulation does not permit resident Indians to utilize multi-managers funds, the launch puts ICICI in an elite circle of Asian banks to offer the product. For Russell, the alliance marks its second bank tie-up in Singapore, following the launch of a DBS multi-manager fund, which has raised over $500 million from the retail market over its five-year history.
The ICICI-Russell multi-manager fund will consist of a portfolio of 25 different managers. The research route comprises of a 130-strong team that scrutinizes the managers, their qualifications, stock pickings and past investment performance, explains Bruce Pflaum, Russell's managing director Asia.
The alliance comes as the Asian multi-manager business is increasingly picking up steam and the market further expands to include players such as HSBC and Northern Trust. "Asia is following a well-worn path," says Pflaum. "As wealth is created people need specialist investment managers and we see a large amount of potential in Asia to significantly grow the multi-manager product.
"Our business is a long-term customer focused portfolio solution and is an appealing solution as Asia's asset management industry will continue to mature."
According to Cerulli Associates, financial services research and consulting firm, the multi-manager investment vehicle is the fastest growing segment of the investment industry worldwide, with assets doubling over the past seven years and an annual growth rate of 14%.