Foreign fund assets surge in Southeast Asia

Added 17th June 2016

However, assets are concentrated among the larger players, according to Cerulli Associates.

Foreign fund assets surge in Southeast Asia

Thailand and Malaysia have been welcoming foreign investment funds.

Foreign equity fund assets in Thailand, in US dollar terms, surged to $6.3bn in 2015 from $3.1bn in 2014, according to the research firm.

In Malaysia, wholesale feeder assets nearly quadrupled to $744m in 2015 from $188.8m in 2014, and private unit trust foreign exposure increased to 16.8% from 14.9% over the same period.

“Despite these spectacular growth rates, assets of foreign-invested feeders in Thailand and Malaysia have largely been concentrated in the hands of the larger players or among the few biggest funds,” said Manuelita Contreras, an associate director at the firm.

The S$1.5bn ($1.1bn) feeder fund assets managed by J.P. Morgan
Asset Management in Thailand and Malaysia, for example, mainly came from four of its funds: the JPMorgan Global Healthcare Fund, the JPMorgan Global Income Fund, the JPMorgan ASEAN Equity Fund, and the JPMorgan Asia Pacific Income Fund.

Elsewhere in Southeast Asia, in the Philippines 13 foreign-invested feeder funds and two funds of funds were launched as of the end of 2015. Feeder fund unit investment trust funds were first introduced in the country in late 2013, the firm said.

At least four Indonesian managers have launched foreign-invested Shariah-compliant funds as of the end of April.

“For foreign managers looking to engage third-party fund distributors in Southeast Asia, a long-term track record and global brand recognition will come in handy, though we understand that Thai managers are also open to appointing less well-known managers,” said Contreras.

Southeast Asian managers also generally prefer to work with fund managers with an Asian presence and a shorter turnaround time, Contreras added.

Credit Suisse moves in

On the wealth managment side, opportunities in Thailand have not gone unnoticed.

Credit Suisse said in May that it had set up a wealth management team in Thailand to tap rising demand from high-net-worth individuals, as part of its expansion in Asia.

The Swiss bank, which has operated a full-service securities house in Thailand for 16 years, said in a statement that Thailand has a sizeable high net-worth wealth pool compared to other major regional economies such as South Korea or Singapore.

The bank said is targeting two key client segments - HNW individuals with assets of more than $2m, and ultra-HNW individuals with asset of $50m, or $250m in net wealth.

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