US fund house JP Morgan Asset Management’s new Asia-Pacific CEO has made China his top priority.
Speaking yesterday just hours after JP Morgan AM announced his appointment, Michael Falcon said he was also eyeing intermediary distribution of funds and changing institutional investment habits in the region as key growth drivers.
Falcon, previously head of the asset manager’s Asia-Pacific funds business, was yesterday named head of global investment management (GIM) for Asia Pacific. He replaces Jed Laskowitz, who has been Asia-Pacific CEO since August 2012. Laskowitz is now based in New York after becoming co-head of global investment management solutions.
Falcon started in the role in July but a JP Morgan AM spokesman declined to give a date, citing company policy.
Falcon reports to GIM chief executive Chris Willcox for his regional CEO responsibilities, and will continue to report to GIM clients head George Gatch for his funds business role.
Falcon yesterday said that because of its “sheer size and rate of change,” China was at the top of the list of priorities in his new role.
“Without question China is a place where you have to not just think about it but act on it aggressively,” Falcon told AsianInvestor. “We really want to grow there.”
JP Morgan AM currently has a mainland joint venture - China International Fund Management – and sells via the qualified domestic institutional investor (QDII) market.
The next stage of China growth for Falcon will be mutual recognition of funds, a licence for which JP Morgan AM applied last month. Falcon said he did not know when approval would arrive, but he was “eagerly awaiting” it.
On a regionwide basis, Falcon said intermediary distribution of funds was the largest opportunity for growth. He was particularly looking at countries where the savers were becoming investors.
“We’re seeing the intermediary market develop, serve them better, become more sophisticated, and focus on training and tools that they need to help this rising and mass affluent group invest better,” Falcon said. “It continues to be our biggest opportunity in building up that funds business.”
The other opportunity Falcon spied was in the changing behaviour and increasing sophistication of institutional investors in the region, such as sovereign wealth funds, pension schemes and provident funds.
“All of these investors understand risk and risk management better, and they’re pushing to diversify – that means globalising their investment strategies, and shifting asset class, and a push to alternative investments.”
Last month Falcon told AsianInvestor that JP Morgan AM was looking to expand its retail business in Southeast Asia, specifically in Malaysia, Indonesia and the Philippines, via a partnership model.
However, the firm will continue to manage Southeast Asia from its hub in Singapore for now, said Falcon, who was speaking at the time in his fomer role as Asia-Pacific head of funds.
Falcon became Asia-Pacific funds head in October last year, after working for JP Morgan in New York for four years. He was head of retirement for JP Morgan AM between December 2010 and October 2014.
Prior to JP Morgan, Falcon was a managing director at investment bank Merrill Lynch between 2000-2008, where his roles included head of the retirement group and direct businesses. In between Merrill Lynch and JP Morgan, Falcon worked in an advisory capacity at several companies. Between 1985-1989, Falcon worked at Chase Manhattan Bank and later spent 11 years in senior financial and strategic management positions at Sara Lee Corp.
Laskowitz has worked at JP Morgan AM since May 1996, according to his LinkedIn profile. GIM Solutions, which Laskowitz now co-heads, encompasses JP Morgan AM’s multi-asset investment arm, retirement, institutional advisory and its ETF business. Laskowitz continues to sit on the board of China International Fund Management, JP Morgan AM’s joint venture in China.
In Asia Pacific, JP Morgan AM has a presence in eight countries, with more than 1,700 employees and an AUM in excess of $140 billion as of the end of June 2015.