Asia's top asset service providers for the year, explained
AsianInvestor’s industry-leading Asset Management Awards are widely tracked by asset managers and asset service providers with a presence in Asia Pacific.
While the awards process has evolved through the years, the awards remain focused on picking the brightest and best stars in the region's asset management industry.
The awards selection procedure is simple but rigorous. This year, we also developed more specific criteria to guide applicants for greater transparency and clarity.
Our judging panel, comprising independent industry veterans and top executives from asset owners across the region, assessed all qualified entries and took lead in providing valuable insights and guidance on shortlisting the best candidates.
The final entries were also assessed by the editorial team to eventually decide on the ultimate winners.
In this first installment, we explain the rationale behind the judges’ selection of winners for the asset service awards.
Once again, a huge thank you to all the judges who participated in the asset management awards.
Best global custodian for asset owners
Strong client retention at 98%, 11 new mandates in 2022 and US$55 billion won in the asset owner space, there was a lot to like about this winning submission from Northern Trust.
As one of the first financial services companies to get blockchain out of the lab and into a production solution, Northern Trust has been leading with an unrivalled data and digital strategy.
It recently announced a partnership with Standard Chartered to support cryptocurrency custody, part of a focus on positioning itself behind new assets to be ready when clients want to invest.
In terms of investment risks and analytics, Northern Trust provides clients with in-depth analytics based on underlying data that can simulate market shocks and stresses on investment plans.
“One key point for us was that given that last year there would have been a lot of valuation requests, Northern Trust has the ability to really help their clients to manage the valuation of assets and the volatility of asset prices,” the judging panel said.
Key figures also caught the attention of judges.
“That they saw an 18% increase in AUC (assets under custody) last year and also CAGR (compound annual growth) of an impressive 24% were the two things that really marked this pitch out for us,” one of the judges said.
The fact that around 56% of gross additional business in 2022 came through existing clients, also spoke volumes about the strength of the company’s brand and the the depth of its relationships.
Best data and tech provider
Linnovate – the fund service and fintech company – has come a long way in a short time. Launched in 2016, it has notched up some impressive milestones in just six years.
Focusing on the six key areas of fund administration, investor relations, portfolio monitoring, reporting services, consulting service and regulatory compliance, Linnovate is expanding from its Hong Kong base to UK and US markets and beyond.
In 2022, the partnership won 186 deals under 40 accounts globally, with an aggregate of assets under administration (AUA) of US$80 billion.
“We were impressed by the sheer number of deals and accounts,” one of the judging panel said. “The value they created last year during a very hard Covid year was equally as impressive, especially when they mentioned they had 100% year-on-year growth.
“Given the economic downturn that’s not easy to achieve.”
However, it is in private markets where judges saw most of the upside with this winning submission.
Linnovate currently has an AUA of US$100 billion for over 500 funds solely in private markets and now sits in the mid-to-large segment of the asset servicing market.
“Traditional asset markets have been suffering so whoever can provide innovation to the market in terms of alternative private market investing is going to have an edge,” the panel said.
“Linnovate has been heading in the right direction with this. Most traditional asset owners are considering alternatives and private markets after last year’s crisis.”
Best bank for cross-border custody
The French global banking group has always placed special emphasis on its cross-border offering, leveraging a depth of regional expertise that has assisted clients to expand internationally for more than two decades.
However, 2022 has proved to be an exceptional year for France’s largest listed bank.
In what was a very tightly scored race for this award, BNP Paribas pulled ahead of its rivals through the improvements it made to its offering.
“This was an impressive result across the region and particularly in China,” judges said, adding that its “China capability was a major step forward”.
Its application for a local custody licence in China was approved in 2022 and now complements its 2021 licence (QFI) which permits it to directly support all of China’s access schemes.
In terms of new asset classes, BNP Paribas continued to build out private capital solutions to support managers to access the rapidly growing private equity real estate market.
The results of this focus showed in the bottom line. With 2022 revenue that grew at double-digits year-on-year, it outperformed the market in difficult conditions to overtake its rivals in this space.
Perceived as an innovator in the sub-custody market, BNP Paribas’ stake in AssetMetrix gives its clients access to digital reporting and analytics capabilities to support cross-border expansion across all asset classes.
“We also continued to grow VCC (venture capital corporation) clients as this fund vehicle is an increasingly used structure for cross-border investment,” the bank said in its submission.
Best index provider global
S&P Dow Jones
While newer and more niche offerings may be nipping at the heels of this venerable index, S&P Dow Jones was across so many categories and dominated in so many sectors that it was difficult for judges to go past this impressive submission.
In particular, it has expanded its regional suite of ESG (environmental, social and governance) indices in Asia to position itself behind almost every development.
With China’s 30-60 decarbonisation (a reference to hitting peak carbon emissions by 2030 and carbon neutrality by 2060) goals moving fast, the net zero transition in the Greater Bay Area (GBA) is targetting the zone as one of the centers of China’s green finance revolution.
S&P DJI and Bank of China Hong Kong launched the S&P BOCHK China Hong Kong Greater Bay Area Net Zero 2050 Climate Transition Index in July 2022.
The first climate transition index covering listed companies in GBA, the aim is to measure the performance of companies in the bay area, while achieving a variety of decarbonisation targets.
S&P DJI is also backing Asia – and in particular Singapore – as a hub for cryprocurrencies.
The index provider launched two new indices in September specifically designed for the Asia Pacific market: S&P Cryptocurrency Top 10 Index (Singapore Close) (USD) and; S&P Cryptocurrency Top 10 Dynamic Rebalancing Risk Control 40% Index (Singapore Close) (USD).
With a long track record of bringing transparency to a wide range of markets across asset classes and geographies, the famed index is betting on doing the same for this emerging asset class in Asia.
Best global custodian for mutual funds
The sheer depth and reach of the HSBC offering in terms of global custody for mutual funds made this submission a standout winner. For the judges, there was little else that came close.
“Given the size of its platform and its global reach there was not much debate,” judges said of a comprehensive and detailed pitch. “There was a great range of innovation and plenty of compelling projects.”
With a huge platform, HSBC offers a comprehensive global custody and direct custody network that covers 93 countries and 95 markets, including a proprietary network of 37 markets.
In Asia alone, its assets under custody (AUC) reached US$4.3 trillion (more than half its global AUC of US$8.3 trillion) highlighting the success of an ‘Asia first’ focus that has seen it grow its securities services strongly in the region despite the challenges of 2022.
Key business wins during the judging period included the Saxo Bank appointment as its third party clearing (TPC) partner and key innovations included the launch of Orion its proprietary tokenization platform.
In terms of firsts, it has supported the first Asia Crypto future ETF in Hong Kong for two ETF issuers as well as supported the first Shenzhen-Singapore cross-listing fund. Altogether it was behind the launch of 17 ETFs in Hong Kong with assets under management (AUM) share of more than 90%, amounting to US$1 billion.
Ultimately, HSBC was able to demonstrate a growing market share across multiple jurisdictions against the backdrop of adverse and volatile market conditions.