Thai investors’ appetite for overseas exposure is growing fast, something that has not gone unnoticed by asset managers, both foreign and local. This has resulted in a growing focus on the individuals who provide access to product shelves.
As part of its ongoing project to identify the most influential gatekeepers in the region, AsianInvestor has consulted fund executives to compile our list for Thailand and assess the current landscape.
While Thailand is a key market for global fund managers in Southeast Asia, the majority service it from Singapore. Only a few, such as Aberdeen and Manulife, have an onshore presence, with most relying on selling foreign investment funds (FIFs) via feeder structures.
The Thai funds industry posted 6.7% year-on-year growth in net assets to exceed Bt4 trillion ($114 billion) last year. Within that, FIFs have gained popularity, with 2015 fruitful as money poured offshore in search of higher yield and diversification.
"Foreign investment funds were the biggest story of the year, with net asset growth of 51.6% [Bt335 billion],” noted Kittikun Tanaratpattanakit, senior analyst at Morningstar Thailand.
A total of 77 FIFs were launched last year, with 332 now available to investors: 220 in equity, 46 in commodities, 33 in fixed income and 33 in allocation funds. Equity funds hold a 64% market share, noted Tanaratpattanakit.
Global allocation FIFs led the market by value, with net assets of Bt62 billion, followed by global healthcare funds and European equity funds. “Global property, real estate investment trusts and infrastructure funds might be the next big hit,” predicted Tanaratpattanakit.
Local banks account for 80% of fund sales in Thailand, with market share dominated by Kasikornbank, Siam Commercial Bank (SCB), Krung Thai Bank, Bangkok Bank, Krungsri Bank and Thai Military Bank (TMB). Foreign banks, domestic securities brokers, insurers and independent financial advisers account for the rest.
Until recently, the major banks – except TMB – only sold funds from their in-house asset management arms and not from local rivals. They are now opening up, but they remain far from the open-architecture platforms one sees in Hong Kong and Singapore. As a result, the most influential fund selectors still sit within a bank’s affiliate asset management firm.
According to Morningstar, the top asset managers for FIFs are Kasikorn, Krungsri, UOB Thailand, TMB and SCB. At end-2015, Kasikorn AM led with a 38.6% market share (net assets of Bt129 billion), although this shrank 10% year-on-year. Krungsri ranked second with 11.62% (Bt39 billion) and UOB third with 9.23% (Bt30.6 billion).
This year, however, Bank of Thailand and the Securities and Exchange Commission introduced a guideline that looks set to be a game-changer in pushing local banks to open their platforms. It allows wealthy Thais to buy offshore funds directly via onshore banks. Investors no longer need have to rely on FIFs or local managers for offshore exposure.
The thinking is that this will bring product choice to Thai investors and facilitate diversification. It also means distributors can negotiate directly with international fund houses on products.
Citibank Thailand was the only distributor to have taken advantage of this change as of late March, but observers say other banks will follow as Thai investors demand choice and unconflicted investment advice.
So who are the people to know when it comes to getting on the right shelves? We will run through the list in alphabetical order in the coming days (and it also appears in full in the upcoming April issue of AsianInvestor magazine).
First senior vice-president for strategic planning
Kasikorn Asset Management
The person that foreign fund manufacturers really need to know at Kasikorn Asset Management is Benjarong Techamuanvivit, who heads product and corporate strategy.
Her responsibilities include supervising product management and communications, and ensuring the company achieves its financial objectives. Techamuanvivit (pictured) works across the organisation on strategic initiatives in business development, operational efficiency and customer satisfaction.
Kasikorn Asset Management has the largest market share in the country for foreign investment funds, with 34% and Bt107 billion in AUM. The firm has a total of 37 FIFs covering most asset classes and markets geographically. The firm recently introduced a global infrastructure fund to provide relatively more stable returns to investors given the current high global market volatility.
Kasikorn AM sells 95% of its funds through Kasikornbank, with the remainder distributed through three dozen other selling agents comprising smaller banks, brokers and independent financial advisers.
Techamuanvivit joined Kasikorn AM in 2009 and has 17 years’ experience in banking and asset management. Previously she served as chief marketing officer at Manulife Asset Management (Thailand), where she was responsible for sales, marketing and product development. Prior to that she worked as an investment product head at Citibank and a product specialist at Deutsche Bank.