Cambridge Associates’ Singapore branch has won approval to offer discretionary portfolio services to Asian investors, which the Boston-based investment consultancy hopes will help expand its regional footprint.
Cambridge already provides Asian institutional investors and family offices with consulting and research services, offering advice on portfolio construction, manager selection and portfolio monitoring.
But with the firm receiving a capital markets services licence from the Monetary Authority of Singapore last month, clients can now outsource their entire manager selection and allocation process to it. This comes on the heels of headcount expansion and the opening of a second office in the Lion City.
“Rather than providing recommendations to clients and having the clients’ investment committees or staff make decisions based on our recommendations, they can outsource the entire process to us," says Alvin Tay, head of the Singapore investment and consulting business at Cambridge.
"They can give us a specific amount of money to allocate to hedge funds [or private equity] for example, and we’ll create portfolios and invest in the mix of managers that we think is suitable for their portfolio objectives," he tells AsianInvestor. However, Cambridge has not yet won any mandates.
Appetite for alternatives strategies – notably hedge fund and private equity funds – has been increasing in the region for some time, becoming even more pronounced recently as global interest rates remain at record lows and investors seek other ways to generate returns. Family offices tend to have the biggest portfolio exposure to hedge funds and PE, according to data provider Preqin.
This desire for alternatives makes it an ideal time to launch these services in Singapore, says Tay, noting that performing adequate due diligence on managers located overseas is an arduous task even for the largest and most sophisticated Asian investors.
“As some investors look to implement their alternative asset portfolio, some are daunted by the amount of resources they have to allocate to implement these portfolios,” Tay says.
“In the alternative asset space, you need to have specialised expertise and a deep pool of resources to create and manage these portfolios," he adds. "You have to be really thoughtful about your manager selection, and perform deep due diligence on the managers."
Cambridge is speaking with a wide range of Asian investors, across institutions, high-net-worth individuals and family offices, and Tay says most interested parties have a large Asia-based staff looking to create global portfolios, he adds.