Start-up asset manager CCAM is seeking fund managers and analysts to run Asian equities and fixed income mandates in a regional expansion drive, new CEO Mark Konyn tells AsianInvestor.
Konyn landed at Cathay Conning Asset Management in Hong Kong this week with a mission to build a standalone Asian asset manager, serving sovereign wealth funds, pension funds and insurance companies, both life and non-life, as well as corporate funds.
“The challenge is convincing people Conning is worth doing business with, building awareness and reputation. That’s what I enjoy doing,” says Konyn, who departed as Asia-Pacific chief executive of RCM last year saying he was looking for a new challenge, preferably a regional build-out based out of Hong Kong.
“I was impressed by its plans to expand internationally and in Asia. They are starting from a position of knowledge, given that one of the owners is Cathay Financial, which knows the region pretty well and has a commitment almost immediately to invest with CCAM.”
CCAM is a 50:50 joint-venture announced in June last year between Taipei-based Cathay Financial and Conning & Co., a Hartford, Connecticut-based asset manager principally focused on the insurance industry.
Conning, with $88 billion in AUM, is 100 years old and built its reputation running outsourced money for insurance companies in the US, mostly target return and target risk strategies.
It has 262 staff globally at its headquarters in Hartford as well as in London, New York, Dublin, Cologne and now via CCAM in Hong Kong. Of these, 88 are investment professionals based in the US, with strength in corporate bonds in the US and Europe.
Most recently Conning was acquired by private equity fund Aquiline Capital Partners, which was established in 2005 by Jeffrey Greenberg, son of Maurice “Hank” Greenberg of AIG fame. As part of that deal, Cathay Financial also took a 9.9% stake in Conning.
CCAM opened in Hong Kong in the middle of last year and received type 1, 4 and 9 licences from the city’s Securities and Futures Commission this February.
Konyn is hire number four. Last September it appointed chief administration officer Jim Moreno, who had spent the past four years as director of corporate development for Conning in Hartford.
And this March it hired Timothy Matson as Asia-Pacific CIO. He had been head of investments at ING Insurance US, but prior to that he spent a decade in Asia where most recently he served as regional head of fixed income for ING Investment Management based in Hong Kong.
CCAM also has Paul Sandhu doing advisory work, mostly in the insurance sector.
Konyn confirms hires are high on his agenda and he anticipates building a team of 15 investment professionals in Hong Kong, split between equities and fixed income. “We are starting in equities because that is where the immediate demand is within the group, but will quickly move into fixed income before the end of this year,” he says.
He is looking for experienced money managers to run existing mandates, but adds that CCAM is also looking to run some total return strategies as well.
“We are looking to build CCAM up as a local office for the group,” he notes. “We will be offering some of the international capabilities out of the US and Europe. At the same time we will be looking to build up our Asian equity and Asian fixed income capability in Hong Kong.”
Conning does not currently have Asian equity and fixed income capabilities, so CCAM will be starting something new and feeding it into the firm’s global, emerging markets and high-yield fixed income coverage.
Konyn is hoping to bring the firm’s US and European corporate bond expertise to Asian institutions with natural exposure to the euro and euro debt.
“As far as we can see, risk is recalibrating,” he explains. “In the past there was a clear hierarchy of sovereigns, then corporates and lower quality corporates. But that is changing quite rapidly and questions need to be asked which sovereigns and country risk you want to take on.
“Our US corporate capability is very deep in terms of credit analysis and I think it is something which historically has been lacking as an offering in the region.”
He concedes that Conning has been largely domestically focused in the past, but praises the firm for “its highly sophisticated use of technology and deep understanding of the markets”.
In terms of AUM, Konyn says CCAM is starting off modestly but aims to get to $1 billion fairly quickly through group assets. He says his market focus will be China, Hong Kong, Taiwan, Korea, Japan and Singapore, as well as Thailand and Malaysia to a lesser extent.
His priority is to determine which of the firm’s existing capabilities fit demand, and incrementally to build out from there “both in terms of what is in other parts of the world, but also as we build up the stable of products here. I will be looking for additional relationship and sales people to join the team”, he adds.
“We will be going to our clients and testing their interest in extending their mandates to investing in Asia in fixed income and equities, but also within the group itself. Cathay Financial Holding has immediate demand to invest internationally and particularly in Asia, so once we have built the team we will be looking to offer those services within the group as well.”
As at December 31 Cathay Financial had over $166 billion in AUM.