The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Professional investors û institutions, insurance companies, third-party business and funds of funds û are Janus CapitalÆs priority at the moment.
ôWeÆre not all things to all people,ö Lin says. ôWe have very unique concepts that are very well-positioned for professional investors. That has actually helped us in this downturn because our assets have not been affected as much whereas more retail-focused assets would be more jittery in this kind of market.ö
Janus Capital, which has around $160 billion under management worldwide, offers US and global specialist investment products that tend to complement the portfolio holdings of non-US investors in Asia. The fund house has two distinct investment processes û a research-driven fundamental, bottom-up stock selection approach and the risk-managed mathematical approach of Intech, its independently managed subsidiary.
Asia is the fastest growing region for Janus Capital, Lin says. He declines to give a breakdown of the AUM sourced from Asia, but says there is a long-term target of sourcing around 10% of the fund house's global AUM from outside the US by 2012. The fund house also expects to generate around 25% of total long-term fund flows from its international business.
Based in Hong Kong, Lin oversees the firmÆs business operations in Asia-Pacific and is responsible for developing sales strategies as well as implementing the company's global strategy throughout the region. He reports directly to Erich Gerth, CEO of Janus Capital International, who splits his time between the US and the firmÆs international offices. Supporting Lin are Ellen Li, who followed him from Franklin Templeton last month to assume the role of head of institutional business for Asia-Pacific. John Landau heads the operations in Australia, while Shigenori Araki heads the operations in Japan.
Lin has extensive experience in China and Korea, and those are two markets Janus Capital is ôtaking a fresh look atö in terms of trying to gain more business. In November 2006, Intech won part of a $1 billion investment mandate awarded by ChinaÆs National Council of Social Security Fund. At present, Janus Capital is exploring with local counterparts the possibility of QDII partnerships.
ôObviously, demand for QDII products slowed down quite a bit due to market conditions,ö Lin says. ôBut eventually, more of this asset has to go offshore.ö
Janus Capital is very active in Japan and Australia, markets which the fund house expects to keep bringing in solid business in the region. The fund house also has significant business in Taiwan and is trying to gain more ground in Hong Kong and Singapore.
One of the Janus CapitalÆs initiatives includes the creation of an Asian equities fund that will be manufactured and managed from Hong Kong. At present, investments in Asia are handled by the fund houseÆs US-based global team. The fund house is best known for managing US equities, but it recently manufactured a European equities product.
Janus CapitalÆs global portfolios have been on their shelves for around 10 years now and its offering includes the Global Research Growth Equity, Global Concentrated Equity, and Intech Global Core funds.
The Global Research Growth Equity fund is a broadly diversified, sector-neutral portfolio with holdings such as BAE Systems, Siemens, and Nike. The Global Concentrated Equity fund has a concentrated holding of 25 to 40 stocks including Dell, Willis Group and J.P. Morgan Chase. The Intech Global Core fund makes use of the Intech investment philosophy of adding value using natural stock price volatility through a mathematically based, risk-controlled process. That portfolioÆs holdings include ArcelorMittal, BP PLC and Coca-Cola Company.
LinÆs first few months at the helm of Janus CapitalÆs Asian operations coincides with one of the most volatile periods in global financial markets, particularly in the US where many of the fund houseÆs assets under management (AUM) are invested. Previously, he was a regional managing director at Franklin Templeton Institutional in Asia ex-Japan and Australia. He was a veteran at Franklin Templeton, having worked with the firm since 1995, save for two years as CFO of Chinadotcom, a Hong Kong internet-boom start-up.
Just like other fund management companies, Janus CapitalÆs global AUM has shrunk over the past year. In the US, Janus Capital was among the fund management companies that slashed numerous jobs. There has been no purging of the same kind in Asia, however, thanks to the fund houseÆs already slim staff size in this region.
ôWe are a very lean company and that has served us well in this market downturn,ö Lin says. ôWe are relatively less affected. There has been no announcement of a concentrated cut in Asia. We have made some minor adjustments here but the impact on Asia is relatively less. None of the key people are gone.ö
Janus Capital has a staff of slightly more than 30 in Asia from those selling to clients to those servicing clients and all the functional areas from compliance to legal to operations. Slightly less than half are involved in client-facing and client-servicing activities, and the rest support that. These staff include around 20 in Hong Kong, 10 in Tokyo, two in Singapore and two in Melbourne. Franklin Templeton had a staff of around 100 in Hong Kong alone when Lin was still there.
ôWe can continue to grow and continue to position our businessö Lin says. He notes that the fund houseÆs two most recent mandates û Nikko Asset Management and ipac Portfolio Management û were funded just last week.
In October, Janus Capital won a US equity mandate of around $750 million from Nikko Asset Management û one of JapanÆs largest asset management firms û that will closely mirror the firmÆs US research strategy and be managed by its seven global sector-based research teams. In September, Janus Capital won its first Australian mandate from Sydney-based ipac Portfolio Management û worth A$476 million ($386 million) û through Enhanced Investment Technologies, its independently managed subsidiary that makes use of a risk-managed mathematical approach to investing. Outside Australia, Enhanced Investment Technologies is known as Intech.
The main challenge Janus Capital faces in this volatile environment, according to Lin, is helping clients û whether existing or prospective û to deal with the shock of the financial turmoil.
ôOne significant change I see is a lot more focus on risk management, which plays in our favour,ö Lin says. ôIn a fast growing market like Asia, everyone has been chasing returns with little consideration to risks. Now everyone is refocused on risk.ö
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