Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The four-strong range of manager-of-manager funds products be distributed through Polaris Securities and Bank of Overseas Chinese in Taiwan. The funds are named after the maximum equity allocation which ranges from 35% to 90%, while the equity components can include US, European, Japan, Asia ex-Japan and emerging market stocks.
Russell already distributes similar products through Bank of East Asia in Hong Kong, Prudential and DBS in Singapore, and ICICI Bank in India. But the exact format and asset allocation structures vary according to client needs.
Bruce Pflaum, managing director at Russell in Singapore, says the market may not yet be ready for the concept of funds targeting specific events, such as childrenÆs education and supplementary retirement income. But he believes there is clear impetus for the multi-manager concept to become ingrained in the psyche of investors in Asia.
ôThis kind of product has been accepted in other countries,ö Pflaum explains. ôThe launch is a clear reflection of the fact that across Asia people need to have some mechanism in place to supplement retirement income. The products are geared to meet the needs of long-term retail investors. There is a growing realization in the commercial sector as well as in political circles and among private investors that this kind of product is needed.ö
Russell hopes investors will hold the funds, asset allocated among a group of 30 equity and bond managers for between five and 15 years, compared to most other products in the market that are typically held for much shorter periods.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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