Alternatives giant Ares raids UBS for Asia push

Feb 20, 2019

US firm Ares Management has poached UBS Asset Management’s Greater China institutional client head, sparking a reshuffle at the Swiss fund house.

Alternatives giant Ares raids UBS for Asia push

Ares Management has added an institutional sales specialist to run and build out its client business in Hong Kong and Southeast Asia, as the Los Angeles-based firm moves to tap robust regional demand for illiquid assets.

Michael Chen, formerly institutional head for Greater China at UBS Asset Management, started at Ares in Hong Kong this month as principal and relationship manager for Asia.

Hong Kong and Southeast Asia coverage previously fell under the remit of Sundo Kim, Hong Kong-based head of Asia relationship management. But Ares’s growing business in the region has necessitated a greater focus on those markets, said a source familiar with Ares – hence the hire of Chen, who reports to Kim.

With $130 billion under management and a focus on private markets, Ares is understood to have been raising increasing amounts of capital in North Asia – notably from clients in Korea, Japan and more recently China.

This reflects the strong rise in investor demand for alternative assets both globally and in Asia in the past few years, as institutions seek higher returns and broader portfolio diversification. According to research house Preqin, private market funds raised $156.7 billion from Asia-based clients in 2017, up from $63 billion in 2013; though the figure dropped to $76.2 billion last year.

AsianInvestor could not reach Chen, and Ares declined to comment for this story.

Sundo Kim

UBS REJIG

Chen left UBS AM at the end of January after a five-year stint, before which he had worked for US fund house Invesco and Australian firm AMP Capital.

His departure has led to a reorganisation of responsibilities at the Swiss firm, a UBS spokeswoman told AsianInvestor.

Benno Klingenberg-Timm, head of Asia-Pacific sovereign clients at UBS AM, will take on some of Chen’s former responsibilities and clients. He is responsible for institutional business for Southeast Asia and also, as of February 1, Hong Kong and Taiwan.

Raymond Yin, head of Asia Pacific and head of China onshore at UBS AM, assumes Chen’s institutional coverage for China. Beat Goetz remains head of institutional client coverage for Asia Pacific.

ASIA RAMP-UP

Chen’s hire expands Ares’s client coverage desk, which now has around six staff across the Hong Kong, Shanghai and Sydney offices, a Hong Kong-based recruiter told AsianInvestor. Chen's main focus at UBS AM was on real estate and fixed income.

Ares has the bulk of its assets ($95.9 billion as of December 31) in non-investment-grade credit, with a focus on US and European investments. It also has $23.5 billion invested in private equity, managed by three teams across North America, Europe and China, and $11.3 billion in real estate in the US and Europe ($7.9 billion in property equity and $3.5 billion in debt).

Ares is far from alone in its move to build out in Asia. Asset managers – both alternatives specialists and traditional fund houses – have been moving to set up or expand teams in the region with a focus on private markets in recent years.

To name a few examples: Singapore's Fullerton hiring in private equity, Eastspring moving into alternatives, Schroders establishing a real estate team, and firms including Aberdeen Standard, Allianz and Nuveen increasing their property team headcount.

Recruitment of private debt talent is a particularly big focus at present, the Hong Kong-based headhunter told AsianInvestor. That is despite concerns being voiced about the falling level of returns available on such assets as against the amount of risk they entail.