US fixed income manager Pimco has made two senior hires with a view to expanding into the retail market in Asia. It is also mulling its options in China, including whether to set up a local presence, said Michael Thompson, Asia ex-Japan head of global wealth management (GWM) and head of Singapore.
But for the time being the firm is prioritising its focus on the retail segment in Asia via intermediaries in Hong Kong and Singapore, having established a foothold in the private banking and institutional markets.
To this end, Thompson has brought in Steve Chiu head of retail for Hong Kong and Stacie Wang as head of China for GWM.
Chiu joined this month to cover banks, insurance firms and independent financial advisers in Hong Kong. He was most recently vice president for investment funds in Hong Kong at Manulife Asset Management, but left that role late last year, as first reported by AsianInvestor.
Wang, previously executive director of institutional sales for North Asia at Goldman Sachs, joined Pimco in August. She is now responsible for covering intermediaries in China.
Thompson said both were additional roles.
Meanwhile, other members of the GWM team have assumed new responsibilities. Todd Staley, Southeast Asia head of private bank coverage, will now also lead the family office sub-channel. Freida Tay, who had worked on the private banking team, is now taking responsibility for the mass-affluent segment in Singapore. Resources will be added to support Staley and Tay, said Thompson. Henry Chui continues to head the private bank channel in North Asia.
Following growth in the GWM business, which was launched in 2012, Pimco decided to tap individual investors and expand into new markets, namely Malaysia, the Philippines and Thailand, said Thompson. The three markets allow the sale of foreign products via onshore feeder fund structures.
Thompson said Pimco saw China as a bigger opportunity than Southeast Asia, but had no set timeline for establishing onshore operations in the mainland.
"For now we are comfortable with Hong Kong and Singapore as bases of operation, and we have no plans to be onshore, although that is something we review very actively," said Thompson.
“[The question of whether to set up a wholly foreign-owned entity (WFOE)] is clearly one to consider at some point," he added." At some point Pimco will make a decision, but we don't have a strict timetable."
Other international fund houses have made the move to set up a China WFOE – including Aberdeen, Fidelity and Franklin Templeton and JP Morgan – and others, such as Axa Investment Managers and Pictet plan to do the same.
Asked whether Pimco would participate in regional passporting programmes – such as the Hong Kong-China mutual recognition of funds scheme, Asean Collective Investment Scheme or Asia Region Funds Passport – Thompson said there it had no immediate plans to do so. It sees Ucits products as still relevant for the firm to grow its business in the region, he added.
Crowded retail space
Retail is a crowded space and has a high barrier to entry, Thomson conceded. "But we have a long-standing relationship with large key banks, and strategies such as yield and income that answer some of the needs that clients are looking for."
Pimco's Asia assets under management stood at $180 billion as of end-August.