Consulting firm PricewaterhouseCoopers (PwC) has opened an investment fund centre in Singapore to provide distribution services to asset managers expanding internationally and within Asia.
In what it claims is a regional first, PwC said it opened the centre to meet the needs of growing numbers of managers moving into Asia’s retail market, lured by passporting and rising levels of wealth.
PwC is in recruitment mode for its new centre and is looking to hire managers and research analysts to bolster the new team.
Meanwhile, new research has indicated that it won’t be easy for Asian players to expand beyond their home markets, despite years of trying.
The firm has appointed Armin Choksey, director in the asset management practice at PwC Singapore, to head up its Asian Investment Fund Centre, reporting to Justin Ong, asset management practice lead for Asia.
Ong said PwC decided to launch this new service unit because of the growing number of international firms expanding into Asia’s retail market, driven by the rise of the middle class and the prospect of fund passporting.
Likewise, Asian players are expanding within the region and internationally. The new service unit will act as a hub to connect Asian players with PwC’s Luxembourg Global Fund Distribution practice. Ong declined to name which managers have signed up for this service.
The Singapore fund centre will focus on providing market entry and strategy analysis, asset manager and distributor operational due diligence assessment, industry benchmarking and research capabilities, as well as cross-border fund registration and distribution support services. These services are in addition to the existing assurance, tax, regulatory and compliance offerings.
The centre officially opens today and Choksey is looking to hire 3-5 managers and research analysts.
“With the advent of the Asian fund passporting schemes, Singapore is uniquely positioned as the only developed asset management jurisdiction common between the existing Asean collective scheme and the upcoming Asia Region Funds Passport scheme,” said Ong. He said Singapore’s thriving private banking network was another reason to base the investment fund centre in the city-state.
When asked if there were plans to open a similar centre in other Asian markets, Ong said this would depend on market demand. For instance, it may offer this in Hong Kong when demand for such services kicks in, driven by the upcoming Hong Kong-China mutual recognition scheme.
Meanwhile, investment research house Cerulli Associates has warned that it won’t be easy for Asian players to expand beyond their home markets. Cerulli cited as an example Mirae Asset Global Management, the largest manager in Korea, which has been trying to develop a pan-Asian footprint, starting in 2003 with the opening of a Hong Kong office. It has also ventured into India, China and Taiwan.
As of the end of 2014, Mirae was ranked 32nd out of 44 managers in terms of retail fund AUM in India. Its joint venture in China ranked last, while its joint venture in Taiwan ranked 33rd out of the 37 Securities Investment Trust Enterprises, according to Cerulli.
“The poor rankings in each of these countries can be regarded as setbacks in themselves. As you know, fund houses look at rankings and have annual or multi-year targets to climb up the rankings,” said Rachel Poh, senior analyst at Cerulli.
“Fund houses also formulate their business strategies based on their rankings in order to enhance them. Mirae seems to be struggling with that at the moment.”
It has been the likes of Fidelity, JP Morgan and Franklin Templeton that have been able to adapt well to fragmented Asian markets and successfully establish footholds across the region, Cerulli noted.
When asked about Asian managers’ prospects in expanding outside of their homes countries, Poh said: "The future is a positive one - AUM for many Asian markets are growing and investor sentiment is improving. But what these managers have to be aware of is that it takes time. This has to be a long-term goal. Do not expect to see results immediately. Fidelity, Franklin and JP Morgan didn't achieve their success overnight. Success requires patience."