Investec AM opens Singapore office in Asia push

Investec Asset Management has opened a Singapore office and installed Tobie van Heerden to cover institutional sales for Southeast Asia and Korea.

The move happened in the past few weeks and comes as the $100 billion asset management arm of South Africa's Investec PLC looks to sharpen its focus on the region.

Establishing an investment management presence in Asia focused on emerging market debt is something it is deliberating now, confirms Mark Samuelson, managing director of Australian and Asia institutional business.

AsianInvestor previously reported that van Heerden had been appointed Investec AM’s head of Asia institutional business in March this year.

An Investec release from September 2010 also shows that it hired Helen Leung from Neuberger Berman as regional business development director with responsibility for Asia.

However, in what Samuelson paints as a formalising of its coverage, van Heerden now heads up Southeast Asia and Korea, while Leung focuses on Greater China.

They are overseen by Sydney-based Samuelson, who describes the opening of a Singapore office as “a natural expansion and an important next step for our future development”.

It was back in 1998 that Investec acquired UK-based Guinness Flight Hambro as its international asset management business, rebranding it Investec Asset Management in 2000.

Given the AM firm’s roots the first port of call was to build its UK base, says Samuelson, while Guinness Flight also had an office in Hong Kong.

He explains that Investec’s approach to equity investment starts with a screening process based on four factors – value, quality, earnings dynamics and technical factors. This creates a universe of stocks that it analyses fundamentally in a strategy built on behavioural finance.

This, says Samuelson, largely negates the need to meet managements and as a result Investec AM centralised its investment teams in London and Cape Town. It relocated HK-based equity staff to London a decade ago.

“But I suppose the world is evolving and we need to evolve with it,” adds Samuelson.

The first step has been to bring back a dealer to Hong Kong. Since then it has developed its emerging market debt team, which is co-headed by Peter Eerdmans in London and Werner Gey van Pittius also in London.

“It is not impossible now as the emerging market debt side develops that we could put people back on the ground covering Asia,” says Samuelson.

He sees EM corporate debt in particular as “an exciting area that will develop very quickly”.

While he says it is more likely Investec AM will put EM debt staff on the ground in Asia first, he suggests down the line it could add equity staff as well. Its EM equity coverage is headed by Archie Hart based in London.

“It is not happening as we speak, but at some point it does make sense to put people on the ground and it is something we are thinking about very closely,” Samuelson says.

“We see Asia as a very important part of our future strategy. We are here for the long haul and we will build a significant business in the region.”

In terms of assets sourced from Asia-Pacific, Samuelson confirms only that 5-10% of Investec AM’s $100 million total AUM is from the region.

Clearly the focus for the firm is on the key institutional investors as it seeks to build its presence in the region.

Samuelson confirms many investors are in risk-off mode and are nervous in a low-yield world. At the same time he points out the big funds are long-term players that are internationalising their portfolios, as much as a release and diversification from saturated home markets as anything else.

He argues that working with the big sovereign wealth funds and pension funds is all about coming up with solutions, not commoditised products.

“You have to be very open and really listen to what they want, and you need flexibility within your organization to cater to what it is they are looking to build or invest in,” he says.

“If you don’t the likelihood is you will deliver a very standard solution to them and they will chose someone else who will go that extra mile.”

Investec was one of 12 foreign managers to win one of 21 mandates issued by China’s National Social Security Fund, which were divided into multi-asset, emerging market currency and debt products, commodities equities and global real estate.

The announcement in July stated that AGF Management, Investec, JP Morgan and RBC Global Asset Management had been handed natural resource responsibilities.