Over the past couple of months AsianInvestor conducted a project to identify the leading protagonists in fund selection and distribution; you can find more background on the project by clicking here.
We worked on this project from a product providers’ point of view, with the aim of helping them to increase the penetration rate of mutual funds in client portfolios.
Our first pick of the 25 most influential people in fund selection has focused on individuals based in Asia’s two top global hubs: Hong Kong and Singapore. We began with a long list and whittled it down based on public opinion and our own research.
The choices represent key touch points for product providers in this region. Building relationships with these individuals can be the difference between getting on a distributor’s shelf or not.
The list appears in full in the November issue of AsianInvestor magazine. Last Friday we unveiled the first three: Roger Bacon of Citi Private Bank, John Cappetta of Julius Baer and Ernest Chan of Morgan Stanley Private Wealth Management.
Here we list the fourth and fifth gatekeepers by alphabetical order.
Head of investments for Asia Paciﬁc, global retail banking and wealth management
Toby Chan is influential within HSBC’s retail and wealth management group. She was appointed head of investments for Asia Pacific on its global managed product team this May, reporting to Lane Prenevost, global head of investments based in London.
Previously head of retail and wealth management customer experience, now Chan helps develop the product shelf and services in the region, focusing on mutual funds, asset allocation services and third-party manager research.
Based in Hong Kong, she leads a team of three backed by centralised due diligence support on manager and fund research. For example, HSBC has a reference centre for long-only vanilla funds based in Bangalore, which reviews new and existing products.
Chan meets fund companies regularly and works with HSBC’s country heads to review product ideas and evaluate whether funds align with bank strategy and fit the shelf, rather than working with a global or regional master product list. In many cases, she initiates due diligence research on products.
“The process and governance ensure products on our shelf are optimal to meet the portfolio construction needs of our investors,” she says. “When there’s a need for conviction in fund selection, the group product team will define selection principles and the governance process to ensure consistent customer experience.”
For pitches Chan urges fund providers not to focus heavily on historical performance and past and present sales volume.
“We believe we must not only be looking in the rear-view mirror for figures and trends, but also focus on whether a fund delivers on its promise, has a clear value proposition and if the manager has a sound investment and risk management framework to ensure sustainable, repeatable performance,” she notes.
Head of strategic business development
AIA Pension and Trustee Company
Appointed in September 2013, Leo Cheung (pictured) has performed a dual function for the past year, averaging two calls a day with fund managers.
His primary function is to take care of AIA’s pension product platform. The firm has $7 billion in assets under management under Hong Kong’s Mandatory Provident Fund scheme and a 10% market share, behind only HSBC and Manulife.
Cheung previously also had responsibility for investment-linked product (ILP) management. However, AsianInvestor was informed he was set to hand this part of his remit to Vanessa Chan, formerly of HSBC, enabling him to focus solely on the pension product platform, where he engages with managers closely, including on regulatory requirements.
Cheung is the first point of contact for fund manufacturers, to see whether their ideas fulfill the firm’s selection criteria. AIA has around 80 products on its platform and engages its consultants to make portfolio recommendations every quarter. It prioritises funds of a certain size and considers this against performance. It also looks at peer fund rankings.
Once a product idea is taken on, it must pass a Hong Kong product committee and subsequently a group committee before approval. As Cheung says of AIA’s process: “It is dangerous to rely on one person to make [selection] decisions.” He reports to AIA Pension and Trustee CEO Stephen Fung.