UK fund management duo set for Asia entry

UK-based M&G Investments is setting up an office in Asia, while fellow British firm Legal & General Investment Management (L&G IM) is understood to be mulling a similar move.  

Hong Kong is M&G’s destination, say multiple sources, although the firm, which has £200 billion ($315 billion) under management, has also considered Singapore. It is in the process of leasing office space, seeking to recruit staff in the city and transferring executives to the region.           

A senior Hong Kong-based executive at Prudential Corporation – M&G’s parent company – confirms that M&G is transferring staff to Asia. But he did not give a timescale, how many are coming or what their functions would be, or whether the firm would also be hiring local staff.

L&G IM, with £320 billion in AUM, is less far down the track than M&G in terms of its plans. It is believed to be at an exploratory stage; working on what regional strategy to adopt. It is understood that no decisions have been made on whether to locate in Hong Kong or Singapore, which types of staff to put in place or the likely timescale for proceeding.

Senior executives at both firms are known to have spent time in Hong Kong and Singapore in recent weeks, discussing matters such as the kind of regional hub to set up, the type of people they might need on the ground and other market-entry issues.

Both L&G and M&G declined to comment on their plans.

It’s safe to assume that M&G will put sales executives in place, but whether an investment team will be set up is another matter. The firm already has clients in the region through its relationship with Prudential Asset Management, but does not have an on-the-ground presence.

Another issue is what the firms are likely to sell to Asian clients. M&G offers a range of UK- and Europe-focused funds; funds focused on Asia, emerging markets, international sovereign bonds, Japan and North America; and a series of global funds, such as a convertible bond product and a dividend fund. 

Whether the firm will create new product for its new markets or rely on existing funds is another question.

One Hong Kong-based consultant tells AsianInvestor: “Some firms try to build a better brand [in the region] before they put front-office people on the ground. But regulators want [fund managers] to come and set up a full-service type of business and add to the depth of the asset-management industry in some of these cities.”