Vontobel Asset Management, traditionally an institutional business, has moved to target distributors in Asia with the hire of Suzanna Wong as its first regional head of intermediary sales. It is also looking to further diversify its asset base beyond equities – which account for more than 90% of its regional AUM – into fixed income.
Wong will focus on private banks in Hong Kong and Singapore above all, as well as insurance firms and family offices, but Vontobel AM does not plan to enter the retail segment, said Ulrich Behm, Asia-Pacific chief executive.
Behm (pictured below) said he had previously looked after intermediary clients, but he did not have time to constantly reach out to them. Hence the need for a senior addition to the team dedicated to that segment, he told AsianInvestor.
Wong joined Vontobel today in Hong Kong from rival Swiss firm Syz Asset Management, which closed its office in the city last month, as reported. She had worked there for two years as Asia-Pacific head of sales.
Before that, she held a similar role at Swiss asset manager GAM. She has also worked in sales and product management positions at HSBC subsidiary Hang Seng Bank and Citibank.
Vontobel now has nine sales staff across the region – seven in Hong Kong and two in Sydney – and does not plan any other offices at present, said Behm.
Wong's hire follows a trend seen in recent years, whereby typically institutional asset managers – such as Axa Investment Managers, Goldman Sachs AM, T. Rowe Price and more recently Principal Global Investors – have sharpened their focus on intermediaries in Asia.
Morever, research by consultancy Casey Quirk concluded in late 2015 that the fastest growth in the region is likely to be driven by individual rather than institutional investors in the coming years.
The intermediary market has subsequently grown fiercely competitive. Asked how Vontobel would compete, Behm said it would do so on product performance.
He added that the firm had two global unconstrained bond funds, “asset classes that are generally in demand now”.
There is the problem of low yields and on top of that the risk of rising rates in the US, said Behm. Hence global unconstrained and absolute-return bond strategies, offering yields of 3-5% with a controlled risk budget, will be a big topic in the years to come, he argued.
Asked whether Vontobel was eyeing a partnership or presence in China, such as a wholly foreign-owned entity, Behm said that was not on the table at present. “China has put a brake on outbound investment to protect the renminbi and reduce outflows,” he noted. “Who knows how long that is going to last?”
The only retail business Vontobel AM has in Asia is in Taiwan, where it sells products through a master agent, Eastspring Investments. But recent rule changes in Taiwan have affected the speed of registration of funds, noted Behm, since managers can only register one product at a time if they don’t have an onshore presence. Vontobel has no plans to put one there currently.
The Taiwanese regulator has in recent years introduced what it calls a 'deep-cultivation plan' designed to encourage foreign fund houses to make a deeper commitment to the local investment industry.