Prudential jumps on bandwagon to tap Filipino wealth
A unit of UK-headquartered Prudential will launch an asset management company in the Philippines in the fourth quarter as the insurance giant becomes the latest international firm to try and tap the country’s burgeoning wealthy population and build its local presence outside of traditional life insurance.
The firm, which will be named Pru Life UK Asset Management and Trust Corp, will initially offer unit investment trust funds (UITFs) that may include bond and equity funds, a spokeswoman said. A few funds have been approved by the Bangko Sentral ng Pilipinas and approval is awaited for further products, she added.
The asset management division will initially sell offshore bonds managed by Eastspring Investments, with a bond fund to be the first out of the gates, Pru Life’s local chief executive Antonio de Rosas was quoted as saying. The operation will likely target affluent and high net worth individuals in the Philippines.
A spokeswoman said the trust's internal investment team will manage the funds on offer with Eastspring remaining an adviser to the trust company.
Prudential has become the latest international financial institution to try and tap burgeoning wealth in the resurgent nation. On Thursday (July 25), Maybank launched its first private wealth management arm in the Philippines, while in late June HSBC said it was building its private banking presence and making several new hires. And in early June, US investment consultant Mercer named Harold Tan as a wealth business leader for the Philippines.
A Pru Life spokeswoman said the country’s expanding middle class and growing wealth offers strong growth potential for the asset management and trust industry in the Philippines. Per capita income in the country is expected to increase from $3,550 in 2015 to at least $5,000 in 2022, according to the country’s National Economic and Development Authority’s 2017-2022 Philippine Development Plan.
This growth means the country is predicted to join the list of the world’s top 10 fastest-growing high net worth countries in the next four years, said a January report by market research firm Wealth-X. The Philippines had 24 individuals worth more than $500 million, 130 individuals worth between $100 million to $500 million and 190 individuals worth between $50 million to $100 million in 2018, according to Credit Suisse's Global Wealth Databook. Its high net worth population is expected to expand at a compounded annual growth rate of 9.4% by 2023, Wealth-X said.
Economic growth in the Philippines has surged as President Rodrigo Duterte has clamped down on corruption and crime, providing confidence to foreign investors. His administration has also removed the bottlenecks facing key infrastructure projects in Manila and elsewhere. Higher private consumption due to lower inflation, a steady growth in remittances, spending on elections will fuel growth this year, the World Bank said.
Pru Life is keen to take advantage of the condtions, and is still hiring for some positions at the trust and asset management business, said the spokeswoman. While it will operate separately from the insurer’s life insurance business, Prudential plans to use life insurance sales agents to offer UITFs to existing life insurance clients.
The potential new fund flows from the Philippines could offer Eastspring some good news in what has so far been a turbulent period. The fund house saw its entire top management leave in a shock shake-up earlier this year.