PLACE FINANCIÈRE & MARCHÉS — Fonds

Carte blanche – Alfi 2021

Asian distribution – still attractive in 2022



Andrew Hendry, head of distribution – Asia Pacific at Aberdeen Standard Investments. (Photo: Aberdeen Standard Investments)

Andrew Hendry, head of distribution – Asia Pacific at Aberdeen Standard Investments. (Photo: Aberdeen Standard Investments)

Fund distribution in Asia is always hotly debated in the boardroom and the conclusions vary dramatically – from asset managers who have committed and proven success to those who are still vehemently sceptical of the benefit of entering Asia at all.

We are now over a year into a pandemic world. Has the debate on Asia changed at all? Let’s look at how our industry fared over this time, whether there are any new opportunities and lastly if the challenge of Asian fund distribution has changed.

For those sitting in Asia during the global financial crisis in 2008, it was clear that the region reacts to a crisis differently to the West. March 2020 was a different crisis but clearly reinforces that Asia is a diversifier for global asset gathering. The combination of diligent pandemic management by governments coupled with the high net new wealth creation meant it was mostly business as usual for our industry and clients in 2020. In fact, you could say for many it was business better than usual. UBS Wealth Management noted APAC (Asia Pacific) net new money of USD25 billion – 58% of its global net new money – and profits up from USD500 million to USD1,060 million. Taking Broadridge’s GMI figures, we see a similar story: in March 2020, APAC cumulative net flows barely register the crisis, continuing to grow through 2020, whilst EMEA (Europe, Middle East and Africa) flows drop into net negative, taking 6 months to recover to the same level.

2020 flows evidenced that Asia is strongly additive to global sales strategies.”
Andrew Hendry, head of distribution – Asia Pacific at Aberdeen Standard Investments.

Andrew Hendry, head of distribution – Asia Pacific at Aberdeen Standard Investments.

So, Asia has done better than other regions over the last year, but is there anything new to Asia’s story? With Hong Kong and Singapore vying as tech hubs, digital distribution is the new frontier. Players are varied – there are the incumbents such as Citi, who launched a digital-only platform in Hong Kong in February this year. We see a plethora of tech firms enter the segment, both large established ones such as Grab – the Uber of Southeast Asia – alongside fast-growing fintechs such as Hugo Save. Digital distribution is not new to the world, but in Asia, once you go beyond HNWIs, the majority of savers do not have easy access to investment services. This is the key difference in the opportunity of this channel versus mature and over-advised Western markets.

If the opportunity is indeed even more attractive than pre-crisis, then what about the challenges? Fund distribution in Asia is still a game of unforced errors in that if you maintain the quality of your sales commitment longer than your peers, you will succeed. However, over the last 6 months, the number of peers has risen. Even private market giants have joined the fray with semi-liquid funds for wealth channels. 2022 is certainly much more attractive but only for those with ironclad commitment.