Pimco, the bond fund specialist manager, is planning to open an office in Hong Kong this autumn and make it its primary location for business development in the region, says Brian Baker, director and CEO for Asia ex-Japan. Baker will relocate from the existing Singapore office to Hong Kong at that time.
"This is the result of the growth of our business in North Asia, which can now support having feet on the ground," he says.
Pimco is part of a trend of institutional asset management firms, including other private firms such as Wellington International Management and Capital International, which got their start in the region in Singapore but have opened or beefed up offices in Hong Kong, reflecting the shift in opportunities.
Singapore's pool of institutional mandates has plateaued, and several fund management executives report that the government has even begun taking back some money previously mandated to global houses. The paucity of offshore opportunities for the investment industry in Southeast Asia or India has convinced the Singaporean government to emphasize private banking and wealth management over institutional asset management, some fund execs say.
Pimco has hired Foong Hock-Meng from Pictet Asset Management to run the Singapore office once Baker moves. Foong will assume his role as senior account manager after a spell of training at the firm's Newport Beach, California headquarters.
Baker is building a team for origination and client service in Hong Kong. He has hired two mainland Chinese nationals fresh out of US business schools, Joseph Zhang and Li Li, and he would like to hire a more senior marketer as well.
"The talent pool is thin in Asia," Baker says. "The people with experience mainly come from the sell side. They don't understand the relationship structure of the business and are more transaction-focused." Pimco doesn't pay commissions to sales people, he adds.
The job for his new team will be to penetrate the next tier of institutional investors. "We know all the major banks and insurance companies in China," Baker explains. "We want to move down the food chain to corporations, mid-sized institutions and provincial municipalities - the groups that will be our customers three years from now."