Manulife Asset Management (Japan) is ramping up marketing of its Asian fixed income and specialist alternatives capabilities as local institutions look to tweak their asset allocations.
To that end, the subsidiary of Canada's Manulife Financial added two sales staff in Tokyo this year, in May and October, bringing the team up to five, who all work across asset classes. There are no plans to add more for the time being, says Hidenori Hirabatake, head of sales and client services, who declined to provide names of the hires.
Some Japanese institutional investors have started investing in emerging-market debt, notes Hirabatake, but Asian fixed income is less well established as an asset category. Yet clients are starting to consider regional bond mandates, “as they don't want to invest in, say, Brazil or Eastern Europe”, he says. They see Asia as a credible bet due to its strong economic growth and relatively low levels of debt.
This comes as some Japanese asset owners are starting to allocate to emerging market equities. The $1.4 trillion Government Pension Investment Fund is the most notable recent example, having awarded its first global EM equity mandates in July.
Manulife AM Japan is also putting more emphasis on alternatives – in particular timberland and farmland assets, which are managed by Hancock Natural Resources Group, a Boston-based unit of Manulife.
Hirabatake says he is seeing rising interest in such niche strategies from both pensions and financial institutions. “There are several prominent prospective clients,” he notes, adding that Japanese clients tend to invest less than 1% of their AUM in these unique alternative products.
(The firm received its first two timberland asset mandates in 2009 in Japan totalling around $40 million from one “very big” and one medium-sized corporate pension fund.)
Moreover, Hancock plans to launch its first commingled farmland fund in June, which will aim to raise $100 million globally, with some of that coming from Japan.
Manulife AM Japan also plans to pitch more intensively its Japan equities and global fixed income capabilities, for which it does not have any local institutional clients as yet.
It manages its Japanese equity and debt portfolios – a total of $15.6 billion – in Tokyo both for Manulife's general account insurance assets and for external clients. Global fixed income and equities are managed out of Boston, while Asia ex-Japan portfolios are run out of Hong Kong.
The investment team in Tokyo is 13-strong, comprising seven on the fixed income side, with three portfolio managers, three credit analysts and one assistant; and six for equities – three portfolio managers, two analysts and one trader.
Manulife AM's flagship offering remains Japanese fixed income, for which it received its first mandate from the Government Pension Investment Fund in October. As the biggest pool of retirement money in the world, GPIF tends to hand out chunky portfolios, with sources suggesting this one is at least $1 billion in size. Hirabatake declined to comment on details of the mandate.
Meanwhile, Manulife Investments Japan, the retail business, launched a new fixed income fund on November 30. The Manulife Investment Trust – Strategic Income Fund is open-ended and incorporated in the Cayman Islands. It aims to provide income by investing largely in government, corporate and securitised fixed income securities and instruments from issuers in developed and emerging markets.
The firm's retail AUM in Japan is around $300 million, making it a lot smaller than the institutional business. This latest launch is a move to boost that figure by tapping typically high Japanese demand for income products.