Sumitomo Mitsui Asset Management (SMAM), with ¥11 trillion ($114 billion) of assets under management, has doubled its headcount in Hong Kong over the past year, in preparation for expanding its scope of business.
SMAM's Hong Kong office has roots that go back 10 years, when it helped manage money for Mitsubishi Sumitomo Insurance, one of SMAM's parents. About three years ago the office was converted to an overseas arm of SMAM. It advised on Asian equities for retail unit trusts sold to Japanese investors, including the New China Fund, which is among the largest China funds in Japan. The firm is fully invested in its $300 million China QFII quota.
About a year ago, Reiji Takamori transferred from Tokyo to Hong Kong to serve as the office's managing director. At that point the office numbered nine portfolio managers, analysts and compliance officers. His background is in insurance and he has also worked in London.
Once in Hong Kong, Takamori began a hiring spree that has brought the Hong Kong office's total to 18 people, with the focus on fund managers and analysts.
He explains SMAM is keen to market its Asia, including China, equities expertise to institutional investors, both in Japan and abroad. The team is run by CIO Hideshige Watanabe, who has been on the ground for over two years and has been running money for over 16 years, including for Sumitomo Life Insurance in Japan.
The firm believes selling its expertise to institutions required "brushing up on our investment process", as Takamori puts it. Institutions are more sophisticated about analysing fund managers' investment processes and controls, and SMAM intends to spend the next two or three years building a marketable track record.
Of course it has an investment process and a track record behind its retail products, which it can also show prospective clients, and Takamori says the firm is likely to roll out more retail funds as well, when the Japanese market stabilises and demand returns.
The global financial crisis has not played a role in the hiring process, Takamori says, noting the team was finalised before markets plunged in the wake of the Lehman Brothers collapse. He concedes that the firm paid a high price to recruit talent, but describes the new members as high quality. The CVs out in the market now are not of high-quality people, as good portfolio managers and analysts have not lost their jobs.
He adds the team in Hong Kong is very international, including mainland Chinese, Hong Kongers, Taiwanese, Malaysians, Indians and Koreans.