It has been a tough but necessary year for Commerzbank Asset Management and its managing director in Singapore, Pascal Crepin. The Singapore office has downsized its staff from 23 to 10 investment professionals, streamlined its product offering and returned to profitability.

The fund manager had stumbled following the Nasdaq crash. In Asia it has enjoyed mixed fortunes, with robust businesses in some markets, but overall the management structure had become disjointed. Returning to profitability has been hard work, but now leaves the firm in strong shape and with some enviable businesses in Taiwan and Korea, the region's most coveted markets.

Despite these successes, however, uncertainty lingers over the Asian business. The parent company in Germany, Commerzbank, has lately been going through a root-and-branch review of the business and concluded it wants to focus on its European, particularly its German, businesses. It is currently in the process of selling Jupiter Asset Management in the United Kingdom and Montgomery Asset Management in California. So outsiders wonder if the restructuring in Asia is meant to revive a core business for the group, or to make it attractive for potential buyers.

Crepin refuses to speculate. "I'm restructuring the business to make it more efficient," he says.

In addition to slashing costs in Singapore, Crepin has been active invigorating the firm's operations in North Asia. It owns 25% of Taiwan's Capital Investment Trust, a top-tier local player with huge market share. The question is now what does Commerzbank Asset Management do with it. The firm has begun registering its offshore funds and discussing partnerships with potential distributors.

In Korea, KEB Commerzbank Investment Trust Management Co. (Kebit), a joint venture with Korea Exchange Bank (Kyobo Life also owns 9%), has made rapid gains. In the wake of the Asian financial crisis, Kebit was caught like most local ITMCs holding a lot of Daewoo Group debt, and the firm lost money.

But since then Kebit has restructured by introducing new credit and compliance requirements, and staged a turnaround. In terms of assets under management, it went from last of all ITMCs to number 15, with AUM trebling in the past six months.

Now the firm manages $600 million in Singapore and sources about $1 billion from Asia including Japan to invest regionally and globally. Now the firm can concentrate on selling more of its European products to Asian investors and continue to work on coordination among the various regional businesses. For example, Commerzbank's private banking network has proven an effective distribution tool that can be further exploited.

Some time next year the firm will also start to look at regional expansion. It lacks a Hong Kong business and would like to sell wholesale, as it does in Taiwan. "But first we need to build a brand name - we're at the very beginning of thinking about this," Crepin says. He would also like to build the offshore institutional business the firm now conducts for Chinese clients. If that continues to grow, the firm will consider putting staff on the ground there.