Even as certain big asset managers pare their Asian teams, a comparative minnow has just made a bold statement of intent with an eye-catching hire and the addition of two more offices in the region. The question is whether Matthews Asia’s business growth can match its ambitions in the region.
The California-based firm, which manages $33 billion of assets, has brought in institutional business veteran Lindsay Wright as head of Asia and global chief operating officer, and is moving to staff up new branches in Shanghai and Singapore.
The fund house has added a deputy general manager (GM) for its new China wholly foreign-owned enterprise (WFOE). Frank Zhang joined in the role earlier this year from a local industry association, said Jonathan Schuman, Matthews Asia’s global head of business development.
The firm also plans to appoint a GM to head the WFOE in the near future and to put two investment analysts in Shanghai, one of whom is due to move from San Francisco before the end of 2018.
Matthews Asia is looking to build on the progress it has made since opening its first office in the region eight years ago, in Hong Kong, Schuman said.
Non-US clients today account for at least 20% of its assets under management, up from less than in 2010, he noted. Matthews Asia’s international AUM is split fairly evenly across Asia, Europe and Latin America, Schuman said, adding that the firm does not have any specific asset expansion targets.
Yet competition for both business and talent is fierce – for instance, some 30 foreign asset managers now have licences to set up investment management WFOEs in China.
Certainly, the fund manager needs “the specialist skills of an institutional salesperson to win big money [in Asia]”, said a Hong Kong-based banker familiar with the fund industry.
“While [Wright’s appointment] is a bit of a surprise, especially as she seemed to have a more senior role at BNY Mellon, it might work because if they have a WFOE in Shanghai then they will need to move quickly to raise institutional money.”
Wright served as Asia-Pacific co-head and head of distribution at BNY Mellon Investment Management since May 2016 until she left in June this year. Before that she had been Asia head of institutional, alternatives and investment solutions at Invesco.
Wright also boasts China experience from her time at Beijing-based Harvest Fund Management. But there are no plans for her to move to Shanghai, said Schuman.
Her appointment does not mean any change for James Campion, Asia head of business development, said Schuman, who continues as Campion’s direct report, while Wright reports to Bill Hackett, chief executive of Matthews Asia.
Nor does Wright’s hire point to a change in focus for the firm, said Schuman; it remains equally keen to tap the institutional and private client segments.
What will prove invaluable is her experience of working for foreign asset managers in Asia, and for a Chinese fund house, he noted, including executing regional growth plans.
Matthews Asia gained its WFOE licence in January but has not yet decided whether it will apply for a private fund management licence in China, said Schuman. That would allow it to manage money onshore for professional and institutional clients.
Nor has the fund house made any firm decisions about which activities the entity will undertake, he added, beyond its plans to bolster analyst coverage of the local bond and equity markets and explore potential onshore distribution opportunities.
Elsewhere in Asia the company is eyeing more partnerships to add to its tie-up with Japan’s Mizuho, Schuman noted. It rolled out first product with the bank earlier this year, raising some $200 million in dollar terms.
Australia is another focus market, he added, because some asset owners there are looking beyond global equity mandates to more granular allocations, such as Asian equity mandates.
Meanwhile, a principal reason for adding a Singapore presence was the fact that the regional decision-making in respect of Asian equities and Asian fixed income is increasingly being done in the region, said Schuman.
In respect of both investment consultants and private wealth managers, fund selection is increasingly being done in Hong Kong or Singapore, he added, so it makes a lot of sense to have a presence in both places.
But could Matthews Asia’s relatively small size be a hindrance to attracting capital from big institutions? Schuman said the firm has robust operational infrastructure and a sufficiently deep investment team to enable it to compete with the biggest asset managers.
Time will tell whether this is sufficient to bring it success in the region.