Standard Life Investments Asia, the asset management arm of Standard Life Assurance Company of the UK, last week received approvals from the China Securities Regulatory Commission (CSRC) to open a representative office in Beijing. The firm has appointed Richard Wang to be its chief representative in China and oversee the opening of the office.
Furthermore, the company has announced plans to open a represenative office in Korea. It has appointed James Cooper - formerly of State Street - to oversee this process, which it hopes to complete this year.
Both the China and the Korean offices will be devoted to business development for the group rather than pure asset managment. The company's $2.5 billion in Asian invesments will continue to be managed from its base in Hong Kong.
According to Mark Bennet, business development manager of Standard Life Investments Asia, the China strategy is fairly fluid at present, taking a cautious view on whether to establish a local JV as so many other asset managers have done in the last year. "We are monitoring opportunities in China," he says. "We are talking to a number of domestic asset management companies and securities houses. There are many interesting opportunities there but there are also still questions as to how best structure a joint venture."
Standard Life has been equally busy on the product side. It has decided to set up a Hong Kong domiciled unit trust to be called the Hong Kong Balanced Fund. This will be set up by the summer and will be aimed at the institutional pension market.
The company is also looking to extend its array of SICAV sub funds, adding Taiwanese and Korean funds to its present Hong Kong focused vehicle.
Such a flow of activity by the group stems from a fundamental bullishness towards to the equity markets in Asia. Over recent months the firm has moved over HK$2 billion out of its global portfolio into regional equities.
This overweight position is because the firm believes Asia is cheap. "Asian equities are attractive on a price to book level," says Elizabeth Soon, Head of Pacific Basin Investments at Standard Life Investments Asia in Hong Kong. Soon believes that a global recovery will lead Asian equities to outperform their global peers. Furthermore an increase in domestic consumption and corporate earnings improvements across the region will add to an overall increase in returns on equity.
But it will not just be a question of buying the index. "The next six months we will focus on stock picking, not just buying exposure to the aggregated index," says Soon. "This is especially true for the Hong Kong market, which has lagged the rest of Asia recently."