M&G Investments, part of UK insurance group Prudential, received a type 1 licence in Hong Kong last month that allows it to market to professional investors in the city.
The fund house already has an office in the city that was set up in 2012, when it launched the Asia business. There are now six staff in Hong Kong and eight in Singapore across sales, marketing, administrative support and public relations.
Andrew Hendry, who runs the regional business as Asia managing director, says he will be further expanding the Hong Kong office in line with the increase in activity. For example, M&G is said to be hiring a compliance officer in the city, but AsianInvestor could not ascertain the individual’s identity.
M&G already has relationships with “more than five” of the 10 largest private banks in Asia and manages $4 billion in Asia of its global £242.2 billion ($391 billion) of AUM, he tells AsianInvestor. It is exploring business opportunities with local private banks, family offices and external asset managers.
“Our immediate goal was to ensure we had the right team in place to serve our distribution partners, but we’ve definitely seen a shift in awareness of M&G in Asia over the last 18 months,” says Hendry. “We’re now in a much better position to build the business in Hong Kong.”
Asked which products are proving most popular, Hendry says: “Equity and bond market performance diverged at the start of 2014, with weakness in emerging markets causing a wider flight to safety that pushed government bond yields tighter and forced many equity markets downwards.”
Against this backdrop, he notes, M&G saw increasing interest in total-return bond strategies, which blend high yield, investment grade, government bonds and cash exposure. “These strategies actively manage interest rate risk, making them ideal for a rising interest rate environment.”
Hendry has also seen increasing investor appetite for M&G’s global equity strategy, which invests in companies that are increasing their dividends.
In addition to running equity and bond funds, the firm manages property and multi-asset strategies.
Asked whether M&G plans to seek a licence to market to retail investors, he says the firm is focused on strengthening relationships with existing clients and building partnerships with distribution partners, as well as developing its institutional client base.
The firm book assets through its transfer agent in Luxembourg.