Principal Global Investors’ new chief operating officer for Asia says his role was created to help the US firm achieve its aim of becoming a leader in China-linked investment products.
Frederick Laydon moved to Hong Kong earlier this year after over three years in Beijing as a special advisor to CCB Principal Asset Management, a joint venture between parent Principal Financial Group and China Construction Bank. He has been with Principal GI for 18 years in different capacities.
Laydon's intimate knowledge of the Chinese equity markets and development of the offshore renminbi market will be instrumental as the asset manager expands its China-focused product range. Principal GI is preparing to apply for a qualified foreign institutional investor (QFII) quota in the third quarter.
“The offshore renminbi market has continued to evolve in a way whereby we find it comfortable to develop ideas and products, both for Principal Insurance Company in Hong Kong and Principal Global Investors," he says.
"We want to be ready when, for example, the Hong Kong authorities allow Mandatory Provident Fund [MPF] portfolios to invest in offshore renminbi securities,” adds Laydon. MPF is Hong Kong’s mandatory retirement contribution scheme managed by the private sector.
In his new role, Laydon will oversee functions spanning legal, compliance, finance, IT, client services, operations, trading and administration. Prior to his appointment, the operations team reported to the functional departments at the regional headquarters in Singapore, or other regional divisions within Principal GI.
With a QFII quota, the fund manager could incorporate A-shares into its regional strategy when developing products. “Asset-management opportunities out of China represent one of the mega trends we are preparing to capture," says Laydon.
In his time at Principal GI, Laydon has also gained a lot of product-development and product-launch experience, as he has worked closely across a broad spectrum of the operations team.
For example, in 2000 he helped the firm launch its first MPF product. And he has been involved with investment products for onshore Chinese investors investing into Hong Kong and global securities through the qualified domestic institutional investor (QDII) scheme.
"I’m keen on having the operations team working well together in providing good execution to achieve strong growth out of Asia and, ultimately, to help the growth of our entire business," notes Laydon.
Andrea Muller, Principal GI’s Asia chief executive, agrees that the creation of the Asia COO role will support the growth and evolution of the firm’s business. “Our business in Asia has grown steadily," she says "and today stands at an inflection point whereby an increased focus on operational excellence is required to keep up the momentum of our development."