Investment consultancies admit they find it hard to turn a decent profit from advising institutional clients in Asia, and the tough business climate in recent years has only exacerbated this issue.
The departures of several senior Asia-based individuals from the likes of Cambridge Associates, Mercer and Willis Towers Watson (WTW) last year appeared to underline the difficulties such firms face. Broadly speaking, they are seeking to shift away from an advisory business more towards one offering investment solutions incorporating both advice and execution. In short, they may compete more directly with asset managers, something that has sparked concerns over conflicts of interest.
In terms of key moves, in April Peter Ryan-Kane left WTW, where he had served as Asia-Pacific head of portfolio advisory for eight years. He had spent time developing business in Southeast Asian markets, including Malaysia, the Philippines, Singapore and Thailand, and targeting frontier markets such as Cambodia, Laos and Myanmar. The firm had decided to narrow its focus to more “core” markets such as Australia, Greater China and Japan. Ryan-Kane has since set up his own firm, PeRK Advisory.
Incidentally, Naomi Denning, who had been WTW’s long-standing head of Asia-Pacific investment consulting, also left the company last year, in July. The firm said Denning had long planned to do so, but it sparked a reorganisation that seemed to reflect the sharper focus on core markets.
Tokyo-based Taro Ogai replaced Denning. He had been with WTW for 14 years, most recently leading efforts to build the company’s investment solutions team in Japan and servicing large clients there. Jayne Bok’s role overseeing sovereign clients in the region expanded to head of investments for Asia, excluding Japan and Australia, reporting to Ogai.
Mercer rang changes of its own as part of a global restructuring in late 2016 and early 2017 by removing a layer of management. Those who left in Asia included Deborah Bannon and Soon Kian Lee, heads of the North and Southeast Asia investment businesses, respectively.
Cambridge Associates, meanwhile, laid off some 10 staff across Asia as part of a global cull of around 50 in March, 3% of its headcount. Laura Rieber, a Singapore-based senior investment director who advised institutional clients, was one of those to leave.
One cannot rule out further paring of consultancy teams, but a similar level of high-level staff turnover seems unlikely in 2018. An interesting side note to all this is that some asset managers created posts in Asia to oversee consultant relationships last year, indicating that they still view these firms as important gatekeepers for institutional investors and fund selectors. For instance, BNY Mellon Investment Management hired former Mercer employee Bannon and PineBridge Investments brought in Michelle White from US fund manager Capital Group.
This is the final part of a five-part series on key hiring trends in the industry. So far AsianInvestor has also highlighted the hunt for Chinese talent, the growing demand for technology expertise, a string of changes at the region's insurers and a strong appetite for multi-asset skills.