Ashmore seeks to tap wholesale market in Asia

UK-based asset manager Ashmore is turning its attention to building relationships with and distributing through private banks in Asia. “Signing these agreements is happening in earnest across all geographies,” says Jerome Booth, London-based head of research.

More than 90% of the emerging markets fund specialist’s $65 billion in AUM is institutional, with some $20 billion of that sitting in the investment portfolios of central banks and sovereign wealth funds (SWFs). The firm has historically been very low-profile, but the move to widen its client base suggests it may be looking to actively brand-build.

“We’ve traditionally had three goals and have added a fourth in the past couple of years,” he says. The first was to make investors aware that there is an asset class called emerging market debt, notes Booth, and “that’s been like banging my head against a brick wall for a decade” but now seems to have hit home.

The next step was getting them to recognise there’s more than one type of EM debt – from sovereign to corporate to money markets and so on, “and that allocation shouldn’t be 50% of global fixed income portfolio but 50% of a total portfolio”.

The third goal was to attract investment from EM-based clients, such as central banks and SWFs, and that now accounts for a third of the firm’s assets. The central bank portfolios are largely in fixed income and mostly with Middle Eastern entities, although a few are invested in equity mandates.

Now Ashmore is focusing on building a presence in the retail and private banking sector – but selling wholesale rather than direct. “It’s not that we didn’t want to before, but we just didn’t have the size of marketing team to do so,” says Booth.

“A lot of our initial fundraising was done by a team of three,” he adds, but the global marketing and distribution team now numbers 50 or so, including non-client-facing staff. “That’s given us the capacity to market to distributors,” he says,

As a result, Ashmore is one of the largest managers of EM debt for the retail/wholesale sector in Japan, distributes Sicavs in Europe and 40-Act funds in the US. Asia still largely fits into the institutional category, but the firm now has the products to go wholesale in the region.

Indeed, yesterday we announced that the firm had received an AsianInvestor award in the emerging market fixed income category for its Emerging Markets External Debt (Sovereign) Composite fund in the magazine's annual investment performance awards.

Ashmore is also set to further expand its investment-management team in Asia, with Kon Chee-Keat the latest addition in the region as Ashmore’s first head of Asian credit based locally (in Singapore), as reported by AsianInvestor. Globally the fund house now has 90 portfolio managers, including in China, India, Japan and Singapore.

Booth declines to comment on how many more people the firm expects to hire, citing Ashmore’s status as a publicly listed firm as making it difficult to state targets.