As part of its effort to identify the most influential individuals in product selection and distribution in Asia, AsianInvestor last month turned its attention to Malaysia, after kicking off the project with its list for Hong Kong and Singapore late last year.
Malaysian investors are keener than ever to diversify abroad. In 2014, which is the most recent data from the nation’s Securities Commission, mutual fund investments generated net sales of M$25 billion ($5.9 billion), of which M$23 billion (92%) was invested in foreign markets.
Although this trend reflects a general demand, it is left to specific people to influence which products benefit the most. In Malaysia, this circle includes both fund selectors at banks as well as advisers at leading asset management companies.
Demand for overseas exposure favours a different set of people than is the case when the flow is mostly domestic and into in-house funds – most obviously it puts foreign banks at an advantage. It also favours the dominant local banks, which have the strength and the resources to retain an edge.
But this trend also supports those fund management companies that have the best capacity to funnel Malaysian money to international investment firms. Local asset managers play a major role in distribution, because regulation forbids foreign funds from being sold directly onshore without a local licence.
A local fund house serves as a ‘fund wrapper’, choosing offshore product to add to a feeder structure, or to a fund of funds. Then they sell the package to a local bank for distribution. This service involves an extra fee, so foreign managers try to pitch ideas directly to banks first, and then seek a wrapper later; and sometimes the bank will have a preferred local partner.
The wrappers are fixers, but they also seek to provide a view on domestic investment appetite and regulatory insight. Regardless of any value they add in this way, the wrappers are key to selling overseas products to Malaysian fund investors.
As part of AsianInvestor’s focus on identifying the most influential fund selectors and distributors across the region – those individuals that asset managers really need to know – here we name our selection of the key people in Malaysia who determine cross-border product placement and flows, listed alphabetically.
AsianInvestor published a list of the 25 most influential fund selectors across the markets of Hong Kong and Singapore in our November 2015 magazine issue, and over the following weeks online (the final two and the full list appeared online on December 23).
We will continue our study of the key figures in distribution by focusing on other Asian markets in future editions.
Chan Ai Mei
Chief marketing officer
Affin Hwang Asset Management
Affin Hwang has muscled its way into the top five local fund houses for offshore feeder-fund sales. It raised M$710 million for feeder funds last year, and its total assets under administration (including pooled funds and segregated accounts) stood at M$35 billion.
Chan Ai Mei runs two of several internal teams dedicated to fund selection. Fund managers at other companies view her as a powerful influencer, given her role in product development and management, as well as wealth and advisory. She is understood to have the ear of local banks.
Affin Hwang chooses products and external managers based on standard factors, such as product features, marketability and sustainability, as well as offshore providers’ capabilities. It is biased toward funds or processes that provide absolute returns and ignore benchmarks; and toward firms that provide adequate marketing support.
Chan is looking for complementary products that won’t cannibalise the existing suite, particularly in income and alternative strategies. The firm currently wraps five funds from four providers: Citigroup First Investment Management, Nikko Asset Management, UBS Asset Management and Value Partners. These are not exclusive relationships.
Chan began her career at Citi’s wealth management business in 1998. She moved to Standard Chartered for a similar role in 2004, and then joined Affin Hwang in 2010 to service the banking channels distributing its products. She took on her current role in 2014.