Asian expansion works both ways
European wealth managers may be exporting executives Eastwards, but their Asian equivalents are also stepping up activities in the West.
Ten years into the new Millennium, we are still being told about history being made in the latest Chinese or Asian century. While fund houses warn about a hard or soft landing in respect to Chinese overheating, wealth managers trip over themselves to embed senior management in Hong Kong and Singapore. HSBC was one of the early movers, followed by Credit Suisse.
Julius Baer has laid down a blueprint for Apac expansion, with Asia named its second home market after Switzerland, under an impressive plan for growth masterminded by private banking poster-boy Boris Collardi.
Basel-based ethical trailblazers Sarasin may express doubts about “friendly rivals” publicising their Asian dreams and hiring armies of advisers to realise it. But the reality is they are at it as well, albeit claiming enhanced sensitivity to local tastes.
But despite the investments of the private banks, and the joint venture activity being ramped up by asset managers such as BNP Paribas, the question being asked in consultancy quarters is how fund houses will monetise this potential in the short to medium-term. After all, while flows collapsed in the US and Europe during the crisis, they have since returned.
The same is not true of Asia, where fund markets have yet to regain their former buoyancy. This is not helped by the lack of a strong funds association. In Europe, the Efama council has many regular sit-downs, thinking up ways to boost investment product activity.
One pioneering change is the use of Asian markets as a testing ground. DWS is among the groups letting loose a prototype product, seeing how it goes down in the East and then launching a lookalike for Teutonic consumption. The Germans recently tried this with a Taiwanese climate change fund predating the European launch.
But while the Europeans push out to the East, they are witnessing a parallel attack on home territory, notes Daniel Enskat at funds consultancy Strategic Insight. Not only are fund houses Mirae of Korea and India’s ICICI building up distribution campaigns, but wealth managers such as Bank of China are causing ructions in Geneva’s staid private banking community through aggressive recruitment drives. And this at a time when European headhunters have turned their backs on their soporific home markets, preferring to focus on the frequent bank-hoppers of Hong Kong and the Arab Gulf states.
The Asian managers have got it right, believes Mr Enskat, for while the long-term story is written in Mandarin and Cantonese, tactical tales are spoken in French and German tongues, where independent boutiques such as Carmignac snap up short-term, post-Madoff back-to-basics business.
