Vontobel AM seeks Taiwan retail boost with master agent switch

The Swiss asset manager has a strong foothold among pension funds in Taiwan, but aims to boost its retail client base by using Eastspring as its master agent, says Asia head Ulrich Behm.
Vontobel AM seeks Taiwan retail boost with master agent switch

Swiss firm Vontobel Asset Management has appointed Eastspring Investments as its new master agent for fund sales in Taiwan, with a view to boosting its retail business there.

This is the first time Vontobel AM has changed master agent since it entered the market in 2009 and appointed EZ Fund as its master agent. The agreement with Eastspring, the Asian fund management arm of the UK's Prudential, received approval in mid-April and was officially launched on May 12.

Ulrich Behm, Asia-Pacific chief executive of Vontobel AM, told AsianInvestor the firm had switched to Eastspring because it was “a strong partner with deep market knowledge and experienced staff”. He added that there was minimal overlap between the two firms' product ranges.

Vontobel AM sources about $6 billion of its $100 billion in global assets from Asia Pacific and $2 billion from Taiwan. Around 90% of its clients in Asia Pacific are institutional and 10% retail. 

Vontobel's institutional clients in Taiwan include pension funds such as state institution the Bureau of Labor Funds (BLF). As of the end of March, the Swiss firm was the fourth largest manager of overseas assets for BLF, after BlackRock, Pimco and State Street Global Advisors. 

On the distribution side, it has some 20 banks selling its funds in Taiwan and will look to further widen its client base there through Eastspring. 

Vontobel AM does not have an office or staff in Taipei; all its marketing and sales activities are now handled by Eastspring. The Swiss fund house has sales staff in Hong Kong and Sydney and has no plans to add any more offices in the region, Behm said.

Vontobel will sell all of its existing 11 offshore funds in Taiwan, which include both bond and equity products. It may introduce one new offshore fund there this year, said Behm, but it hasn’t decided on the type of strategy it might be.

He noted that in the current environment, with negative interest rates in Europe and Japan and a US rate hike expected soon, Taiwanese investors were seeking multi-asset funds and high-yielding fixed-income products offering stable and 5%-plus single-digit returns. 

However, Vontobel faces growing competition in Taiwan from both local and overseas players. Other fund houses, such as Japan's Nomura AM and Taipei-based Fubon AM, are also putting a focus on multi-asset funds in the country.

Vontobel is also not alone in seeking to expand its retail presence in Asia. Several other fund managers, including largely institutional players such as Axa Investment Managers and Goldman Sachs Asset Management, have been looking to attract build their private client base in the region in recent years.

For good reason, perhaps. Research from consultancy Casey Quirk late last year indicated that asset managers are likely to achieve stronger growth in Asia in future by focusing on individual rather than institutional investors.

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