By Jeffrey Hodgson / Reuters
Hong Kong: Mutual fund giant Fidelity International plans to widen its offering of fixed-income products in Asia in a campaign to win more business with big institutional investors like sovereign wealth and pension funds.
“The $260.9 billion international affiliate of the world’s largest mutual fund company expects to see the highest growth in institutional business from South Korea and China,” said Chris Ryan, Fidelity’s managing director for Asia ex-Japan.
“The Fidelity name and certainly the investment credentials of the organisation are very strong, but I guess what we haven’t been as good at in recent times is converting that potential into new business in the institutional segment,” Ryan told Reuters in a phone interview.
“We have strong fixed-income capabilities that perhaps need to be packaged in a different way. We also are looking at broadening the range of fixed-income strategies that we’re offering to both the institutional and the retail markets,” Ryan added.
The majority of Fidelity’s assets in the region now come from smaller retail investors in Hong Kong, Taiwan, Singapore, South Korea, Japan and Australia. It managed $62.3 billion in the Asia Pacific ex-Japan region at the end of 2007.
Ryan, who resigned as head of ING Groep NV’s Asia Pacific investment management arm in January, spoke after Fidelity said on Monday it had hired its third senior executive this year from ING.
It said Carlo Venes, most recently the regional chief marketing officer for the ING fund unit, would join the firm on 4 August in a newly created role as head of institutional business for Asia excluding Japan.
ING is one of the largest money managers competing with Fidelity in Asia. Other major competitors include BlackRock Inc, Franklin Templeton parent Franklin Resources, JPMorgan Chase & Co and Schroders .
Hong Kong-based Ryan said the hiring was part of Fidelity’s campaign to win more business with big investors in the region, such as the sovereign wealth funds who control some $3 trillion globally.
“We’re open for business in the institutional segment. We’ve got good exposure in some markets, markets like Hong Kong and Singapore, but less exposure to a lot of the other sovereign wealth funds we’re aiming at securing more business from,” he said.
The largest Asian sovereign wealth funds include Singapore’s GIC and Temasek, as well as the recently launched $200 billion China Investment Corp.
But the Asian fund industry veteran said he defines the term more broadly to include other savings pools such as government controlled pension and insurance funds.
Ryan expects the highest growth to come from China and South Korea, where a mandatory corporate pension scheme is being rolled out that will require South Korean companies to outsource the management of a portion of their retirement savings.
Fidelity also plans to expand its China team after naming Long Zhan in May as its new head of China. Zhan was most recently country manager for China with ING Investment Management.
“As far as China is concerned, we obviously need to build more around Long. And we will be doing that over the next 12 to 18 months,” he said.