This week Alan Harden, the new Asia-Pacific CEO at BNY Mellon Asset Management, announced key internal staff moves that represent the opening shots in a new battle to become a significant investments firm in the region.
In an interview with AsianInvestor, Harden explains that the firm, which is an umbrella of 19 boutique investment specialists ranging from passive to alternative investments, wants to create in Asia the kind of manufacturing and structuring prowess it has in North America and Europe.
“Globally we are a $1.26 trillion asset manager,” Harden says of the group. “[In Asia-Pacific] we’re the ‘point-six’ of that.” He says that amount of raised assets is primarily invested in products created and run out of the US or Europe. “It doesn’t move the dial. Our vision is to make [the Asia business] more relevant. It’s a 10-year-plus journey, but we need to move the dial significantly over the next three to five years.”
BNY Mellon AM does not manufacture investment strategies or products in this region, aside from a nascent China A-share capability with its joint venture in China (with Xian-based Western Securities) and a forex-overlay business in Australia (Pareto Partners), as well as a more substantial Japanese equities and fixed-income team in Tokyo.
That is going to change over the next decade, says Harden, who adds that the firm intends to lay building blocks over the coming three-to-five years.
He declined to specify what asset classes or products are top of the list, but says the growth will be organic, looking to get some of BNY Mellon AM’s boutique managers in the US and Europe to replicate or grow their strategies in Asia.
But that’s only part of the story. “Asia doesn’t need more mutual funds,” Harden notes.
The next steps involve both creating local distribution efforts, obtaining licences for local product manufacturing, and creating new roles to develop structured solutions for institutional and wholesale clients.
To that end, BNY Mellon AM is initiating moves to obtain onshore licences in Korea and Taiwan to manufacture and distribute local and international products. It is also applying to Hong Kong regulators to become a manager in the Mandatory Provident Fund (MPF) system.
“This is the Rubicon that BNY Mellon Asset Management has overcome,” Harden says, noting the firm now fully backs the need to deliver funds and services locally. “We must do this in structures that fit local needs, and not just rely on selling Ucits products. That’s a key piece [to our strategy]: to domicile products locally and have the capability locally to deliver different structures…Understanding it needs to be locally delivered is what sets us apart.”
This week Harden announced internally a number of key new roles in Asia. The firm is looking to fill two new positions: one, a head of products, strategy and corporate development, the other, a head of retail distribution.
The corporate development role is meant to wrap all of the firm’s existing and future manufacturing capabilities for clients, both at a regional level as well as in-country. This person will work with the various boutique investment companies within BNY Mellon’s network, as well as with BNY Mellon Asset Services’ teams.
The custody and clearing side of the business is among the world’s biggest, and with those flows and existing client base, its people can help identify where a type of product or structure may be of use.
The distribution head is meant to work across the region to build local and international products and structures, from funds to unit trusts to managed accounts, for local distributors. (Currently the firm’s only retail presence in the region is in Japan.)
In addition, Harden has announced several senior transfers.
Doni Shamsuddin will become COO, responsible for fund operations, information technology, commercial analytics and client services. Currently serving in Tokyo as CFO and COO of the Japanese asset management business, he is going to transfer to Hong Kong.
Louis Boscia is to become CFO for the region, reporting to Harden and to Steve Lipiner, who is CFO of BNY Mellon Investment Management. He is moving from New York, where he was controller at affiliate Drefyus & CIS, to Hong Kong.
Jean-Paul Lim continues in his role as chief administrative officer but in an expanded role covering all of Asia-Pacific, with a view to governance, compliance and enterprise risk management.
All of these people will join Harden on a newly created Asia-Pacific asset management executive committee.
Lorraine Hendrickson, who has spent the past several months supporting Harden in Hong Kong, will continue to help shape business strategy and report to the new head of products, strategy and corporate development.
Harden, a native of the US, joined the firm in June after approximately three years at the helm of ING Investment Management’s Asia-Pacific business. He has worked in the industry for around 30 years, mostly in Asia and the UK. Other roles include running Citigroup Asset Management’s Asia business from Tokyo, and heading Alliance Trust in London. He reports to Curtis Arledge, vice-chairman of BNY Mellon in New York.