Only a moron would describe 2011, the year that has just expired, as a boring one for the institutional investment management market in Asia. In case you blinked and missed it, I’ve put together a quick recap.
Way back at the start of the year, the Hong Kong SFC made quite a splash in announcing who would follow Martin Wheatley as CEO. Granted special early release from his jail cell as part of China’s bail-out of the State of North Carolina, Bernie Madoff made a short press statement about his latest challenge before disappearing from public view, not to be seen again until summer when he took up the position.
We’ve all become quite used to seeing it by now, but the first few times we did consultant meetings after they turned themselves into advertising boards was a bit odd. Having their shirts emblazoned with your rival firms’ names like European soccer teams was an inspired move for their margins, no doubt, although as the year wore on, clients were getting a bit nervous about their manager recommendations. Still, in such a limited market, another choice has yet to emerge.
An embarrassing month for my firm, Integrity Asset Management: WikiLeaks turned its spotlight onto some less-than-savoury practices regarding payments we (may have) made to Middle Eastern SWF employees. This is exactly why we had employed our local Mr Fixit, who turned out to be fixing it for one of our rivals instead. The court cases rumbled on throughout the summer.
Nothing happened in April. In fact, even AsianInvestor shut down its website, posting a notice saying ‘Back when Madoff arrives…’
The emergence, almost overnight, of the world’s largest SWF took us all by surprise but the sales machine quickly swung into action and we all spent much of the month in Pyongyang plying our wares to the handful of generals who had survived what is now known as ‘The Three Minute War’. It seemed that Integrity’s (alleged) misdemeanours in the Middle East counted in our favour with this client, with officials making a beeline for me and my team each morning at Reveille. No need for cash in brown envelopes here – we all just dug out our old Nokias and told them they were iPhone 5s.
Singapore was on full alert in June, when vigilante gangs took to the streets in protest about the over-proliferation of private bankers in the Lion City. Spectators feared violent clashes between the baying mob and the vast pinstriped army but the bankers relented by taking voluntary leave for the next two months. Their predominately French bosses have still not noticed.
Hereafter in Hong Kong known as Madoff-month, July was when things really got exciting. The SFC’s new motto ‘It takes one to know one’ was the first bold step. The new leader moved quickly to assuage investors’ concerns, however, by setting out an honour system of regulation, something he had picked up during his sojourn in the US penitentiary system.
This was when William T Fitzgerald’s career really took off. After all of Integrity’s international management were convicted of ‘enticement’ by a court in The Hague, the coast was clear for me to assume the position of Deputy CEO – NJA. One step closer to that corner office for yours truly, it was only natural that our US HQ would want to post out an interim CEO at least until things die down. 2012 might be the Mayan year of destruction, but it will be the year of creation for my career.
Ahhh, bubble-bursting month, but not the one we all suspected at the time. With hindsight, it was obvious, but for some reason nobody had seen the coming demise of exchange-traded funds. After years and years of uninterrupted growth, the blowing-up of a couple of Qatar-listed ETFs destroyed confidence in the entire industry. Seems like Integrity got lucky in deciding against my Alchemy ETF after all, crazy as their view seemed at the time…
Merger mania gripped the region’s fund management industry in October, with the big getting bigger, the small getting eaten and the mid-sized getting hung out to dry. To my dismay, Integrity declined to take part in the M&A fest. Banks looking to offload their ETF businesses, hedge funds running scared of Bernie, those who couldn’t afford the consultant sponsorship – lots of decent fund managers up for grabs at the very time our guys in the US decided to undertake a wholesale review of the international business. My Irish ancestors would call it Murphy’s Law, I guess.
Our friends in North Korea finally funded their mandates in November, the list of exclusions in our global equity portfolio taking up 17 pages of the IMA. We all had a good laugh at the reluctance to own the recently listed Facebook, seemingly on the grounds of the Dear Leader not yet having enough ‘friends’.
So recent in our memories and with the lawsuits still ongoing, people had been wondering for years who would become the Asian Enron and now we know. Only time will tell whether or not Bernie has caught his first big fish…
So on to 2012, all the best to my readers. Please send me your predictions for when the Fed will start to raise interest rates again…
William T. Fitzgerald is a fictional character, as are all the other individuals and companies in “RFP Diary”. Any resemblance to the living or to real firms is purely coincidental. Will’s adventures continue fortnightly.