French firm Natixis Global Asset Management plans to build out its Hong Kong operation as its hub for Asia in the coming year, with a focus on China distribution and liquid alternatives.
The fund house has 63 staff in Asia, including emerging-market portfolio managers and operational staff, and is looking to boost its sales and support headcount significantly in the region over the next two years. Its distribution effort in Asia is largely focused on banks at present.
Matt Shafer, London-based head of international distribution, told AsianInvestor: "We are only just getting started with fund distribution in Asia. We want to be positioned for distribution in China, but we haven’t yet decided the route."
Natixis Global AM has not yet applied to Hong Kong's Securities and Futures Commission for approval under the mutual recognition of funds scheme.
The company operates a multi-affiliate model, through which it services demand for multi-asset strategies. Shafer said investor appetite for non-traditional investments was growing in Asia.
Natixis is continuing to focus on liquid alternatives, which are equity and fixed income strategies that seek to generate uncorrelated high alpha or absolute returns offered in structures that comply with the US’s 40 Act fund law or Europe’s Ucits requirements. This means they are required to have more transparency and liquidity than traditional alternative products so that they can be marketed to a wider range of investors.
Although these funds carry a higher level of risk than traditional equity and bond funds, liquid alternatives are one the fastest growing parts of the investment industry globally. Shafer says total industry sales of liquid alternatives fund grew by 35% in the 12 months to end-September, compared to 10% the year before.
Natixis Global AM plans to introduce at least two new funds for Asian investors in 2016, including a long-short market neutral strategy from French affiliate DNCA and a managed futures fund from Alpha Simplex.
With $900 billion under management globally, Natixis Global AM has its biggest Asian business in Japan, where it runs $15 billion in assets. This is mainly institutional money managed for the likes of the Government Pension Investment Fund and Japan Post.