Manulife Asset Management has hired Mahesh Fonseka in a new role as product manager for its institutional sales and marketing team as it strives to double Asian AUM within five years.
He will cover both equities and fixed income based out of Hong Kong, reporting locally to Asia head Michael Dommermuth and globally to Jeffrey Santerre, international head of product management based in Boston.
Fonseka was most recently at Perpetual Investments and has 12 years of industry experience, mainly in product management and development in Asia-Pacific. He has also worked for Deutsche Asset Management, IPAC Securities and Commonwealth Bank of Australia.
He joins the Asian investment management and sales teams to develop materials and support the communication of investment strategies to institutional sales and consultants.
It fits with the company’s strategy to broaden its institutional and wholesale client base in Asia, and Dommermuth sees Fonseka’s product experience as key in this regard.
On a trip to Asia last month, Jean-Francois Courville, the Toronto-based president and CEO of Manulife Asset Management, told AsianInvestor that the firm was seeking to double its Asian AUM to around $80 billion within five years.
Asia-Pacific makes up almost 20% of Manulife AM’s global assets of $217 billion as at March 31, which includes around $60 billion from multi-asset-class funds.
Courville noted that when parent company Manulife Financial did an evaluation of imperatives for the next five years, two strategies came out on top: winning in Asia, and deploying a strong asset management/wealth management business.
“The desire to see the overall income of the company start to tilt towards Asia is very strong,” he said. “Our asset management team in Asia is right at the confluence of these two thrusts.”
Manulife AM operates a dual mandate that features direct institutional engagement and sales through affiliated distribution channels in Asia and subsidiary John Hancock in the US. Courville reckons that affiliated distribution now accounts for more than 30% of global sales.
He also noted that three years ago Manulife had two dozen four- and five-star-rated Morningstar funds, but that figure has since increased to 53.
He expects the company’s Asian funds to gain traction regionally and globally as their track records mature. Its signature Asian funds include a diversified bond fund and small- and large-cap equity funds. It also recently won a CNH bond mandate.
“Asia is not only becoming relevant from an institutional perspective, it is becoming relevant as a manufacturer of products that we can put around the globe,” said Courville. “I suspect our first successes [for Asia funds] will be here in Asia.
“But in North America you are starting to see a major shift away from domestic strategies to Asian strategies. We will continue adding emerging market capabilities as well to put out to global investors.”
He reflected that institutional investors in Asia were on the whole more conservative than in North America, although he said this was changing gradually.
“I think there is more of a realisation they are looking for alpha now and for strategies that can differentiate themselves and perform well when markets go haywire,” he said. “They are looking at more high-conviction [less benchmark-hugging] strategies.”
As a result, Courville said Manulife AM was looking to bring in capabilities to cover more high-conviction strategies “that do not conflict with what we already have on board”.
In terms of consultants, Dommermuth estimated that 30% of the firm’s institutional mandates awarded in Asia ex-Japan were through a consultant, compared with 90% for North America.
“You are starting to see increased signs of penetration by consultants in Asia,” he added. “But by and large the big-bucket institutional accounts are gate-keeping themselves and running the RFP process. They are really just using consultants for screening purposes.”
Manulife Asset Management is the global asset management arm of Canada-based Manulife Financial. It has offices with investment capabilities in the US, Canada, the UK, as well as across nine markets in Asia. Indonesia makes up a high component of its P&L in the region.
It also has a joint-venture asset management business in China called Manulife Teda and operations in Australia, New Zealand, Brazil and Uruguay.