UK-based Jupiter Asset Management is taking a cautious approach to expanding its business in Asia, with Thailand the next market beyond Hong Kong and Singapore it is eyeing for fund distribution, as it readies two products for launch.
Things that are not yet part of the firm's short-term plans are: use of regional passporting schemes, entering the Singapore retail market and putting investment staff in the region. Jupiter is, however, seeking a salesperson in the Lion City, following the promotion of Madeline Han to Singapore head of sales, after David Conway returned to the UK, as reported.
During a visit to Hong Kong last week, Nick Ring, London-based global head of distribution, told AsianInvestor the firm was in the initial stages of exploring the Thai market, getting to know the business potential and the gatekeepers there.
The Thai fund industry posted 6.7% year-on-year growth in net assets to Bt4 trillion ($114 billion) last year, according to research house Morningstar. A major driver of this were foreign investment funds (FIFs), which recorded year-on-year net asset growth of 51.6% [Bt335 billion], as reported.
In the past, such foreign products had to be sold via feeder fund structures, but this year Thai regulators started to allow international banks to sell offshore funds directly onshore.
Peter Swarbreck, Jupiter’s head for Asia Pacific, said it would look at using both feeder structures and direct distribution for its Thai entry strategy, but that it was too early to provide more detail.
Three years after setting up an office in Hong Kong, the firm said it had gained traction in getting on the platforms of private banks, insurance firms and independent financial advisers, and that it was building relationships with retail banks. However, it declined to comment on the number of distribution partnerships it had in Hong Kong or Singapore.
Meanwhile, Jupiter has no immediate plans to participate in either of the existing cross-border passporting schemes – for either Asean or Hong Kong-China – nor does it intend to form joint ventures or acquire local asset managers to expedite its growth in the region.
“Over time, it makes sense for us to do so [consider using regional passporting schemes], but the whole environment is still developing,” Ring said.
US-based asset manager Capital Group has already said it will not use the Hong Kong-China programme, suggesting it is not the best way for it to access mainland clients.
Ring noted: “We could benefit, but we are not going to rush to do that just because we will benefit from some kind of passporting. If we find that we are in a strong position, we might think of local funds, and if we think of local funds, we might want to benefit from passporting arrangements.”
Passporting under the Asean and Hong Kong-China schemes requires investment staff to be located in the region, and Jupiter does not intend to go down that route just yet, though it may do so in the future.
The company distributes its Ucits funds through private banks, IFAs and insurers in Hong Kong (where it has 18 Sicavs registered), and to institutional and accredited investors in Singapore. It has no immediate plan to enter the retail market in the latter city, for which it would need to acquire a licence and register products there, but again that is something it might consider, said Ring.
What Asian clients want
Like their European counterparts, Asian investors are looking for income-generating and multi-asset funds, said Ring. However, while Europeans have embraced liquid alternative products, Asian investors are still considering them, he noted.
Jupiter will, by the end of the month, start offering an Asian equity income product to retail and professional investors in Hong Kong and to institutional and accredited investors in Singapore, after it is registered with the regulator in each market. The product will be managed by Jason Pidcock, London-based head of strategy for Asian income.
The firm is also in the process of registering a global emerging-markets unconstrained equity product in Hong Kong, though it is yet to confirm the launch date or other details.
As of end-December 2015, Jupiter’s AUM stood at $52.6 billion, of which 3% was sourced from Asia Pacific.