EFG AM on buildout, plans multi-asset fund
A relative newcomer to Asia, EFG Asset Management is on an expansion drive in the region, with a particular focus on Hong Kong and Singapore.
The Swiss firm is looking to boost teams in the two locations, aims to move into the retail market in Singapore and plans to launch a multi-asset strategy in Asia in the fourth quarter.
London-based chief investment officer Moz Afzal visited Hong Kong and Singapore earlier this month and interviewed for four or five new team members. But finding talent has not been easy, he said.
The new hires will be split fairly evenly between sales and investment.
Currently there are two salespeople in Hong Kong and one in Singapore, out of a total of 17 staff in the former city and five in the latter. The firm did not provide numbers for its investment team, which recently saw the departure of its Asia head, Harmen Overdijk.
The firm began operations in Asia in 2010, 10 years after EFG Private Bank set up shop in the region. The bank’s regional staff is now 500-strong.
For the past three years EFG AM, which is headquartered in Zurich, has been building up the team and applying for licences in Hong Kong and Singapore.
In Hong Kong, it is licensed for dealing and advising on securities and for asset management.
Assets under management sourced from Asia reached $1 billion AUM as of last month. To date, its institutional mandates have come largely from Taiwanese insurers.
The focus is now on Singapore and Hong Kong, Afzal told AsianInvestor. It is also looking at potential joint ventures in Indonesia and Thailand, with a view to white-labelling products in those markets.
The firm runs three regional strategies on its global platform, a $30 million Asia fixed income fund, a $196 million Asia equity income fund and a $155 million Ucits China equity fund that invests in H-shares.
As for the firm's investment outlook, Afzal is overweight Taiwan, Asean countries and China for the Asian equity fund, which follows a value approach. The China fund is focused on insurance, logistics and internet companies and brokerages.
“As GDP picks up, the first thing you do when you have a bit of money is secure your future – that’s often through insurance," he noted. "That’s an area that’s been unloved to date – we are very heavily allocated to that sector."
Afzal is also upbeat on online financial services in China, because the country has in some places leapfrogged the developmental stage of having brick-and-mortar banks in every high street.
“If you’ve never had a bank account, you are more likely to go straight to an internet bank account than a bank you can walk into,” he said.
Meanwhile, “Korea is starting to look interesting, with the key drivers being the recent stimulus package and currency appreciation,” said Afzal.
“We missed out a bit on India [which saw a strong stock rally this year]," he added. "Though there’s obvious benefit to a [newly minted Narendra] Modi government, we felt the market overdid it a bit in the short-term, so we pulled back a bit. Now he’s got to deliver, which in India is a hard proposition.
As for recent appetites, Afzal said inquiries for EM exposure had increased over the past six weeks.
“Mutual fund strategies are seeing flow back into EM. Investment banks and asset managers are starting to bring up their allocations to Asia EM generally.”
The next challenge is distribution.