Of the 20 fastest growing fund houses by assets sourced from clients in Asia Pacific, six are from mainland China, according to AsianInvestor’s annual rankings for 2013*.
There are also three from Korea, two from Japan and one from Singapore, in the shape of UOB Asset Management, which achieved the fastest growth rate among Asian firms of 78% (with the help of an acquisition). The other eight are non-Asian firms, although the top three below have all changed their calculation methodology.
AsianInvestor’s top 100 list this year reveals that fund houses boast $6.7 trillion in assets sourced from investors in Asia Pacific as at September 30, an 11.2% rise from $6 trillion last year. It is also far higher than in 2012, when our top 100 saw Asia-sourced assets increase 2.3% year-on-year.
There are six new entries in our top 100 list, four of them Chinese: China Universal, Pengua, Fullgoal and Yinhu. Thailand’s Krung Thai Asset Management and global firm Wells Fargo Asset Management are the other two.
Among Chinese firms, GF Fund Management and China Asset Management make up the six in our top 20 fastest growing, with their AUM growth ranging from 27-66%, although from a relatively low base.
What has underpinned the growth of Chinese fund houses this year has been a return of investor appetite for equities.
“Our parent company raised Rmb8 billion ($1.3 billion) from two equity funds this year,” confirms Nathan Lin, CEO of GF International, the Hong Kong subsidiary of China’s second largest active equity house, GF Fund Management. The firm saw its AUM soar 48% in 2013.
“The fundraising environment remained tough this year. However, given the rebound of ChiNext, there is a return of investment appetite for equity funds,” reflects Lin.
One source attributes the growth of China’s funds industry over the past 12 months to the enterprise annuity business and contribution from newly launched segregated account subsidiaries (see AsianInvestor’s September 2013 magazine edition).
On the back of a regulatory leg-up, these subsidiaries can participate in a wider range of investment activity, including private equity and asset and wealth management.
Non-mutual fund business has been growing strongly on the mainland, at 33% year-to-date. As of October, the segment stood at Rmb1 trillion, accounting for 27% of the Rmb3.9 trillion managed by the nation’s 88 fund houses.
Other firms to have fared well in terms of AUM growth this year include UOB AM, whose AUM figure was bumped up by its S$16 million ($13 million) takeover of ING Funds Thailand in May.
Similarly, Baring Asset Management saw its assets sourced from Asia Pacific surge 67.5% to $20.1 billion. Its numbers were boosted after it acquired SEI Asset Korea in a deal completed in March. Barings now has licences to distribute institutional and retail product in the country.
The firm’s Asia head, Gerry Ng, says he sees opportunities to introduce its product suite to a domestic marketplace. “The mutual fund market for Koreans to invest overseas has been out of favour. We think there will be interest,” he says.
Another global firm to have seen strong growth in assets sourced from Asia Pacific – and this time organically – is MFS Investment Management.
Its growth rate for the region over the past year has been 38.6%, which is actually lower than its 55% AUM increase for 2011-12. Still, it outstrips the firm’s global AUM growth rate of 27.5%.
MFS IM’s investment team has portfolio managers based in Boston and London, with a couple in Singapore, where it recently received a capital market services licence.
Asked if there were plans to increase its on-the-ground presence in Asia, Jonathan Tiu, senior managing director for Asia ex-Japan, says: “We want to adopt a more proactive approach, looking at each market segment to determine what we want to capture, which is institutional clients in Asia ex-Japan. Then we want to boost the way we handle clients in that segment, which is a firm-wide change of strategy.”
MFS has been adding Asian resources in IT, human resources, compliance and legal, he adds. It now has 70 staff in Asia, split between Singapore, Tokyo and Australia.
Among the eight global firms in the top 20, two have seen triple-digit growth in assets sourced from Asia Pacific: JP Morgan Asset Management and Deutsche Asset & Wealth Management (DeAWM), while BNY Mellon AM is 91% up year-on-year.
But each of these top three is now reporting its AUM differently. JP Morgan AM, for instance, previously reported money sourced from Asian clients invested only in Asia-Pacific products; now it includes all its global products.
Similarly, DeAWM has made adjustments. This year it included its 30% holding in Chinese house Harvest Fund Management, while because of the integration between its asset and wealth management business in the summer of 2012, it now also includes its alternatives business. Strong inflows in Japan in the year to September also contributed to its increase.
* For the full list and running order of AsianInvestor’s top 100 fund houses by assets sourced from Asia Pacific, please see our December magazine issue.