After two tenures, AsianInvestor's 2021 Standout CIO Jang Dong-hun looks back on the past six years at Korea's Poba with satisfaction.
The firm, which has around $605 billion in assets under management worldwide, joins Aberdeen Asset Management, Nomura Asset Management, BNP Paribas Asset Management, and Credit Agricole Asset Management in catering to institutional investors in Malaysia.
In line with opening its doors to foreign capital after an eight-year absence since the 1997 Asian financial crisis, Malaysia decided to offer a maximum of five foreign fund management licenses in March 2005. Aberdeen received the first license in November 2005, and the three others got theirs around one year later.
Franklin Templeton has big plans for Malaysia, which it considers its second biggest market in Southeast Asia next to Singapore in terms of assets, but has chosen not to elaborate on these plans for now.
At the moment, Templeton Asset Management, which is Franklin Templeton's Singapore-based Asian entity, sub-advises a number of funds to institutional investors in Malaysia. TempletonÆs portfolios in Malaysia are all white-labelled funds and are distributed by fund management companies onshore.
Stephen Grundlingh, country head of Templeton Asset Management in Singapore, anticipates strong growth in MalaysiaÆs domestic mutual fund market in the coming years.
ôCertainly, it has a domestic economy thatÆs growing rapidly and it has the right ingredients for a good sustainable market into the future,ö he says.
The institutional market in Malaysia is a huge opportunity for Templeton. Grundling notes that the Employees Provident Fund (EPF), which has around RM315 billion ($100 billion) in assets, only has a minimal allocation to overseas investments, and will likely be a source of future asset growth for fund management companies operating locally. The EPF has allocated around 5% of its assets to overseas investments; a percentage it hopes will grow to as much as 20%.
Foreign fund management companies with licenses to operate in Malaysia are exempt from a 50% of assets rule. Local fund management companies in Malaysia can invest only up to 50% of their total assets under management overseas. ThereÆs no limitation on the amount of money licensed foreign fund management companies can manage offshore. The limitation is on the type of clients; they cannot tap the retail market.
The potential for running Islamic funds for institutional investors in Malaysia, which is positioning itself as a global hub for Islamic investments, is also an area of interest for Templeton. Grundling notes that Malaysia may prove to be an attractive base from which to launch a suite of sharia products aimed at the Asian market.
Templeton is considering further expansion in Asia, depending on where opportunities arise. In February, Franklin Templeton bought a 49% stake in Vietcombank Fund Management (VCFB), an asset management firm focused on private equity investments in Vietnam. Franklin TempletonÆs strategic relationship with VCBF marks its first joint venture in Vietnam and while the focus for now is private equity investments, this provides an opportunity for the firm to build a local asset management presence.
Franklin Templeton established its presence in the Asia-Pacific region in the late 1980s and today has offices in China, Hong Kong, India, Japan, Korea, Singapore and Australia.
Census experts say China's population will start to decline at least five years earlier than expected - investors are being warned to keep a weather eye on inflation and structural shifts.
Family offices in Hong Kong want to do more impact investing, but the paucity of ESG talent and the lack of uniform reporting standards are real issues for them.
An impending series of interest rate increases and the deterioration in relations between Russia and the West over Ukraine have worried investors in recent weeks, hence the volatility in US equities in particular.
New Zealand has sufficiently satisfied US national security regulations to be granted temporary exemption from restrictions on investing in sensitive sectors.