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.
He is overseeing a number of transfers and hires in both investment management and custody in order to fulfil the business strategy he and his team have been mapping out since he moved to the region from London last year.
Kevin Hardy will be moving to Hong Kong from London to run Northern Trust Global Investments (NTGI), replacing Thomas Benzmiller, who has moved back to the firmÆs Chicago headquarters (as worldwide head of marketing and distribution). But Hardy will also oversee Japan.
This reflects the firmÆs desire to manage the Asia-Pacific as a region, equal to the Americas and Europe. Until now it has been a mix of local markets often reporting individually to London, which was where the firm had run all ex-US business. Behrens moved to Singapore to head up the effort to give the firmÆs Asian businesses a regional identity and cohesiveness.
So in the case of Japan, for example, the existing NTGI business overseen by Kunihiko Nakao will report to Hardy, rather than to people in London.
And investment management is being upgraded: Benzmiller used to also have a role in custody and asset servicing, whereas Hardy will focus solely on investments.
Another role that is now being put on a more regional basis is that of Laurence Au, who presently runs custody out of Singapore. Au is transferring to Hong Kong, to be closer to many clients, and will report to Behrens, not to the custody arm in London. ôWe need someone with deep experience to be more involved in our China business,ö Behrens notes.
In total the firm will have 15 executives in the region from the three that it previously had (Au, Benzmiller and Nakao). Of these, six are local hires and eight are transfers from the US or Europe, to add experienced hands. The one role that has yet to be filled is that of regional CFO.
Although the firmÆs strategy for the next 18 months has yet to be finalised, Behrens says the broad outlines are known. First is to expand existing relationships. Second is to operate new offices in Australia and China (the firm is waiting for approval from the China Banking Regulatory Commission to upgrade its China rep office to branch status).
Next is to build investment management. The firm is transferring executives from London to handle sales and product management.
It is also beefing up its presence in global custody, on top of 220% growth in assets under custody over the past two years from Asian clients. It will move an experienced person to the region to begin an alternative funds services capability, which will be separate from Laurence AuÆs patch.
The firm is also going to review whether to enter sub-custody in Japan, and is likely to set up presences in Korea and Taiwan in order to market and service custody clients in those markets.
Finally, Behrens and his team are reviewing whether to establish Northern TrustÆs wealth management business in Asia. Northern Trust is one of the biggest private banks in the United States, but itÆs not a business that can be readily exported. To introduce this to Asia would require a lot more building, hiring and planning. But over time the firm will seek to marry investment management and custody in order to reach high-net-worth clients, as it already does successfully in America.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
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