Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
ECM, which markets in Japan, Singapore, Australia and Korea and has around $4 billion in assets under management across these markets, plans to leverage the takeover to expand its product range and establish foothold in the American pensions market.
ECM, founded in 1999 by several ex-Merrill Lynch investment bankers and based in London, sells a range of bond funds and fixed interest notes to institutional clients in Asia Pacific. Its client list, according to Colin Blackwell, the companyÆs Singapore-based chief representative for the region, includes banks and insurance companies. Its product range is dominated by investment grade portfolios but can include high yield, bank capital, asset backed paper and leveraged loans.
ôEvergreen wanted to establish a presence in Asia,ö says Blackwell, ôwhile from our point of view we wanted to leverage its presence in the US.ö
ECM plans to expand its investment management team following the acquisition which sees its staff, including chief executive Steven Blakey and chief investment officer Stephen Zinser, retain a 30% stake in the company. It will also leverage the Wachovia/Evergreen link up to expand into Asia-Pacific bond management.
ôAsian debt markets are in the same position as European markets seven or eight years ago, and as with Europe, the market will expand,ö argues Blackwell.
WachoviaÆs buy continues the trend of major US banks snapping up boutique fund management houses, such as Bank of New YorkÆs acquisition of Newton Investment Management. It is part of Wachovia CorporationÆs expansion plans also following the recent launch of Wachovia Global Asset Management to target markets outside the United States.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains