The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
It has hired Sam Baker as Asia Pacific head of distribution for insurance in Singapore. Baker previously worked at AIG, where has worked for the past decade in a variety of rolls, most recently as Hong Kong-basedáregional director for group management in the Far East, responsible for sales in business units throughout Southeast Asia, Australia, India and Taiwan.
This is a new roll at DeAM that will spearhead marketing, sales and client relationships with third-party insurance clients around the region. Baker will report to Robert Goodman, the global head of insurance relationships who is based in New York and Frankfurt.
The firm has also hired Beatrice Wee to support Baker. Wee joins in Singaporeáas client relations manager for Asia ex-Japan. She joins from Fidelity Investments, where she had served as investment director responsible for selling mutual funds through private bank channels and institutional asset gathering in Southeast Asia. Prior to that, she worked at Morgan Stanley in various client relationship and new business rolls.
DeAM manages $142 billion globally for third-party insurance companies, all in general accounts, which it says makes it the world's biggest provider in this area. Goodman says the current business derives about 50% of its assets from North America, around 40% from Europe and less than 10% from Asia-Pacific, or $12-15 billion.
Much of this comes from Singapore, Japan, Korea and increasingly China; some of these assets remain invested in domestic markets. DeAM maintains specialized investment teams in Hong Kong, Singapore and Sydney, with Singapore the headquarters for the insurance business in Asia.
Goodman says the third-party insurance asset management business differs from other types of institutional business in that it faces more regulations, and a more complicated liability picture. "It's more expensive to service insurance companies because they face more investment and regulatory restraints.
Therefore they require a lot more customization," he says.
And while pension funds, for example, tend to have predictable and stable liability profiles, an insurer's book of business can change with new products or new interest-rate environments. "Insurance companies require constant asset-liability management, which is why there is demand for more structured products, in order to make their investments more efficient from a risk-capital perspective."
So far the third-party insurance business has grown most rapidly in America and Europe. "But," Goodman says, "we expect the highest growth to come from Asia-Pacific because of the number of large insurance companies in markets such as China that are going to be permitted to invest overseas... there is a willingness to partner with groups like ours, in order to diversify out of pure fixed-income exposurse."
Helping insurance companies tap other asset classes, including commodity futures, real estate, hedge funds, infrastructure, equities and structured notes is a big part of Baker's new role, Goodman says.
The growth opportunity is different across Asian markets, Goodman adds. Singapore is full of regional multinational insurers that would like to see dedicated providers boost their regional infrastructure, which is why DeAM is making that its regional headquarters for this business; China's biggest insurers have IPO assets sitting in the bank in Hong Kong, while its insurance regulator is keen to see industry leaders invest offshore; South Korea's top-three life insurance companies are either active outsourcers or looking to do so; and Australian players are keen to diversify their international investments out of fixed income.
Japan's insurance giants have been the least willing to outsource to third-party managers, partly because the are affiliated with big banks with their own asset management capability, but Goodman believes this market will eventually offer opportunities as well.
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