Investment manager Standard Life Investments (SLI) is bulking up its regional sales and marketing team based out of Hong Kong as it strives to raise its Asia-sourced assets.
The UK-based firm – which is 100% owned by Standard Life Group but bills itself as 99% autonomous – has hired Allen Wang from BlackRock as head of Asian institutional business.
The firm is also seeking to hire a head of wholesale business, to provide investment products to professional investors via private banks and wealth management firms in the region.
Wang actually joined SLI in October last year based in Hong Kong, having worked at BlackRock for 13 years, most recently as head of its Taiwan/China institutional business.
Colin Clark, London-based head of SLI’s global client group who spoke to AsianInvestor last summer about the firm's expansion plans, is due to visit Hong Kong this month to announce Wang’s appointment officially.
As a business, SLI has about $264 billion under management globally, of which just $1-$2 billion is sourced from Asia-Pacific (it has just over $2 billion invested in Asia).
Its biggest portfolio is fixed income ($118 billion), followed by equities ($83 billion) and absolute return strategies (over $30 billion). It also invests in real estate and private equity.
David Peng, who joined SLI also from BlackRock in March 2011 as its Asia head, confirms that raising its Asia-sourced assets is a key focus. The firm breaks Asia-Pacific into three sub-regions: Asia, Japan/Korea and Australasia.
“We are moving into new office space in Hong Kong, for expansion reasons,” he says. “We are building our global capabilities in terms of servicing clients, and are targeting key institutions.”
Peng notes it is shifting the way it serves institutions in Asia, moving to a bespoke advisory approach. “They may want an exotic mix of credit and you need to be flexible enough to meet that demand,” he notes. “Institutions want something that is not readily available as a product.”
SLI also aims to take its Ucits-compliant product suite and Edinburgh-based investments expertise to the broader Asia market. The fastest growing area of its business by inflows is absolute return.
Its Edinburgh-based multi-asset team manages around $150 billion in total, including legacy insurance assets for Standard Life. It has six pooled vehicles and around 30 investment strategies; each strategy with a three-year horizon in terms of positive return expectations, with an average of two-to-three strategy changes per quarter.
Back in July 2010 SLI signed a strategic JV with Japanese trust bank Chuo Mitsui, which subsequently merged with Sumitomo Trust. It outsources management of Japanese equities to that entity and in turn manages the active portion of global equities allocation in Sumitomo Mitsui Trust Bank's core balanced fund product available to institutional investors.
Last August SLI set up a Japanese trust structure to feed into its absolute return structure, and this is now being marketed to Japanese pension fund clients.
Peng also highlights SLI’s focus on “guided wholesale” in Asia, and points to its plans for the regional retail market – one it has not strongly targeted to date. “We have IFA [independent financial analyst] relationships through Standard Life, but banks are still in the planning stage,” he notes.
He says SLI is in the process of selecting a master agent in Taiwan and hopes that arrangements will be finalised in the first half of this year. “I am in the process of adding a head of wholesale based in Hong Kong,” adds Peng. “We will look at other markets and develop it thereafter.”
SLI already has a representative office in Beijing, and Peng says the firm is considering applying for qualified foreign institutional investor (QFII) status. While SLI does not have a China joint venture, its insurer parent does – TEDA Heng An Standard Life.
However, SLI’s suite of Ucits-compliant funds require daily liquidity – which is not currently permitted under China’s QFII scheme.
Peng points to segregated mandates for renminbi-denominated QFII licence holders as a future alternative. “That is something that may be utilised if the structure is right,” he says. “We are looking at multiple ways of going into China.”
He also sees opportunities for sub-advisory to manufacturers of Chinese product, as well as investment potential in real estate and private equity in China, and elsewhere in Asia.
In terms of an investment presence in Asia, SLI has one person doing research for listed real estate in Asia. Peng confirms it will look to add to that, either in Hong Kong or Beijing, with the timing uncertain. Firstly it is likely to seek to add a macro view on Asia research.
“I can’t say [adding investments professionals] will be in the immediate future, but it is always in the plans. It depends on the capabilities we want, but we will build an investment team over time.”
Prior to joining SLI, Wang was head of China/Taiwan institutional business at BlackRock. He has also worked as China rep and co-head of Merrill Lynch Investment Management's Taiwan business; head of the international finance department at Polaris Securities; and within the international investment and corporate strategy divisions of Cathay Life.
A spokeswoman for BlackRock confirms that Wang left the firm last September. She notes that Bing Ji, head of its China institutional business, and Brent Kao, head of Taiwan institutional business, have taken on expanded responsibilities following Wang’s departure.