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 moved from the firmÆs London office last month, partly to replace Thomas Benzmiller, who had run NTGI in Asia ex-Japan but has relocated to a new role in Chicago, but also to oversee the firmÆs Japan operations and a new office in Australia.
Bert Rebelo has also recently moved to Hong Kong to head up product management for the region.
ôWe certainly need more people,ö Hardy says. He hopes to hire two to four more hands in 2009. These include client relations managers as well as a research position for NTGIÆs multi-manager product. The firm has Asia-based clients for its manager-of-managers capability, both long-only and alternative, but would like to have someone on the ground to research regional fund managers, particularly in private equity and hedge funds.
Hardy would also like to have someone to handle transition management deals in the region. NTGI offers transition management to Asia-based clients, or for Asia-focused portfolios, but lacks a person located in the region who can oversee deals, including managing clients as well as the trading desk.
NTGI has offered passive and active investments, transition management, multi-manager solutions and securities lending in Asia since 2005.
Hardy says the firmÆs business is in good shape, with Asian institutional investors such as central banks and big public pension schemes keen to increase allocations to passive mandates. This is particularly true for asset classes such as fixed income and emerging-market equities that previously have not been viewed as efficient enough for passive investing.
He concedes this demand is in part a reflection of the bear market: as investors rebalance portfolios, they find performance among higher-fee active managers in aggregate comparable to the index. But he believes, based on past experience in Europe, that passive mandates are sticky and evolve into core allocations even when markets rebound.
ôItÆs a myth that Asian institutions donÆt invest passively,ö Hardy says. The largest investors need to invest in passive funds because of the unwieldy size of their flows, and because of the capacity constraints of active managers.
Hardy says Asia-sourced assets under management this year is flat, with new mandates compensating for the fall in market valuations. According to AsianInvestor magazineÆs December 2008 issue, Northern TrustÆs Asia Pacific-sourced AUM declined by 7.8% year-on-year as of end-September 2008, to $29.5 billion.
Hardy believes the firm will have a good year in Asia in 2009. The biggest challenge is margins. Many fund management companies are competing by slashing fees, he says. Secondly, the firmÆs securities-lending business û like that of its competitors û is in stasis, because thereÆs no liquidity now to reinvest borrowed securities beyond short-term US Treasuries and T-bills. The firm would like to hire someone in Asia to promote this business, but it will wait until market conditions ease and the sec-lending business returns.
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