Demand is steadily growing in Thailand for overseas exposure, boosting the importance for foreign asset managers of knowing the key local gatekeepers, as highlighted yesterday in our assessment of the landscape.
AsianInvestor has identified those selectors considered to be the most influential. We have already profiled Benjarong Techamuanvivit, first senior vice-president for strategic planning at Kasikorn Asset Management. Here are our next two choices.
SCB Asset Management
Siam Commercial Bank’s asset management arm has sway in foreign fund selection. The unit has been led by Smith Banomyong since May 2014. He previously headed SCB’s wealth division, overseeing deposit, mutual fund and bancassurance businesses.
Banomyong (pictured below) works closely with SCB bank on the understanding that product selection is a two-way process. “It’s a push-and-pull thing,” he said. “The sell-side provides feedback on what customers want and what competitors are doing. We work to present investment ideas. We have meetings regularly to sound out the market and plan products.”
Due to the nature of Thailand’s foreign fund market, product selection happens on the asset management side. The recent relaxation of rules, however, will enable banks to put non-Thai-domiciled funds on their shelves and deal directly with international fund managers.
Banomyong argues this will not undermine the foreign investment fund (FIF) business of local firms since direct funds charge higher fees. “The front-end and management fees of [direct onshore] retail funds are higher than our wholesale FIFs,” he noted. “Investors also need to convert the baht to the foreign fund’s currency. Unless you hold the fund for three years, the economics is gone.”
SCB Asset Management works with big global fund houses for FIFs, which are sold through 16 entities. But SCB is the unit’s major distributor.
Banomyong joined SCB in 2010 as head of corporate strategy. He spent 13 years with Citigroup, where he began as a management associate. He took on senior roles, including head of corporate finance and capital market in Indonesia, head of global relationship banking in Thailand, and Asia head of local currency credit trading in Hong Kong.
UOB Asset Management (Thailand)
With more than 22 years’ investment experience, Bulbon oversees the firm’s strategic direction and gets involved in designing product strategies for retail and institutional clients.
In terms of foreign investment funds, UOB Asset Management (Thailand) boasts an AUM of BT31 billion, giving it a market share of 9.2% (third largest). It sells FIFs via two distributors: UOB and Thai Military Bank. It also sells direct to investors via its private wealth business.
For fund selection, UOB AM (Thailand) works closely with the regional team to determine the most suitable funds/managers for particular investment strategies and asset classes. But the final decision on which approved funds to on board for the Thai market is made by the local business led by Bulbon.
Right now Thai clients are clamouring for low-volatility products, according to Bulbon. “We are trying to launch products suitable for high volatility markets,” he observed. “Clients want products that will protect the downside even if the upside is not as high.”
Thailand’s Securities and Exchange Commission is reviewing whether to allow Thai individuals to invest in hedge funds for portfolio diversification. At this stage only ultra high-net-worth investors look likely to be allowed to, with clarification expected mid-year. Still, hedge funds are firmly on UOB Asset Management’s radar. “We are working on launching funds with absolute-return strategies or fund of hedge funds,” Bulbon said.
Bulbon joined UOB Asset Management (Thailand) in 2003. Before that he was a deputy investment director at CPB Equity (the Crown Property Bureau’s subsidiary), a portfolio manager at Prudential Portfolio Manager Asia, and vice-president at Thai Investment and Securities Company.