ESG is no passing fad, as more investors are convinced that alpha can be found in ESG and regulators continue to introduce rules to lift ESG standards.
SCFB has a put/call option to acquire the other 20% of A Brain, which Daswani expects to be executed early in 2008. This will give SCFB one of the marketÆs leading fund administrators alongside its existing custody, trustee and cash management businesses.
Daswani says the deal is part of Standard CharteredÆs regional strategy to offer a complete funds servicing capability. ôThis was not a one-off,ö he says.
Standard Chartered declines to say what it paid for the business, which did attract other suitors. Daswani says SCFB won because of its on-the-ground presence, following Standard CharteredÆs acquisition and integration of Korea First Bank. Among other things it offers A BrainÆs approximately 55 employees career paths beyond A Brain, which was established in 1999 as a family-owned company.
Fund administration in Korea is a fast-growing business, thanks to the boom in the mutual funds industry. But fund admin has been a stubbornly local business. Previous attempts by global providers such as State Street and Deutsche Bank to access the market via joint ventures failed; it wasnÆt until HSBC acquired one of A BrainÆs competitors, AmTek, that a global provider made a secure beachhead.
This is in part because fund admin is highly automated and efficient, as well as because Korean law requires it be done onshore. Fund managers have electronic links to the Korea Securities Depository for the actual processing, and fund administrators such as A Brain and AmTek, as well as Korea Exchange Bank and Aitas, act more as middle office providers. Therefore global custody banks have had little to offer in onshore fund accounting û particularly when any service must include Korean language abilities and a specialised technology platform. This deal will now introduce a direct, foreign-owned competitor to AmTek.
Acquisition of course delivers these things, making it to date the only way for foreign players to enter the market. Daswani says another factor making the acquisition attractive was a growing demand among local investors for a one-stop shop, so that users of A BrainÆs services can also access SCFBÆs custody, trustee and cash management services.
Although A BrainÆs client base can review whether it wishes to remain with the provider under the new ownership, Daswani expects little movement, and adds A BrainÆs foreign clients say they are pleased to have a global provider involved. The deal also provides a one-stop shop for fund management companies that distribute products via SCFBÆs platform.
Daswani says now that regulatory approvals have been obtained, Standard Chartered will review whether to rebrand A Brain. It wants to retain all of the staff, although it is seconding CB Chang, who ran securities services sales at SCFB, to A Brain to be the senior executive in charge. Before working at SCFB, Chang handled trustee work at Citibank in Korea.
In its second annual sustainable investment report, the sovereign wealth fund says it invested $1.79bn in ESG bonds. Experts say asset owners next need to consolidate their standards.
Senior executives at the Taiwan financial group and Canadian pension fund believe that companies have to make an ESG transition, and may not have a choice in a few years.
Record low borrowing costs in Australia are feeding demand for the country's real estate, with domestic and global investors raising their allocations into the sector.
Experts have a diversified view on the appeal of private assets across the region, but one thing's for certain - inflows are rising, particularly into China and the US.