US asset manager Barings aims to open its Singapore office in early November, and is looking to expand its private assets teams through hirings or acquisitions, AsianInvestor can reveal.
Duncan Robertson, head of global business development and head of Asia Pacific shared the firm’s latest business strategies with AsianInvestor in an exclusive interview, noting that Asia Pacific now makes up more than a third of its third-party assets under management (AUM) and is expected to be a key driver of growth for the the firm.
Charlotte-headquartered Barings is owned by Massachusetts Mutual Life Insurance (MassMutual) and has $380 billion AUM globally as at the end of June.
“Our annual Asia Pacific-sourced third-party client has seen double-digit growth rates over the last few years,” according to Robertson.
The executive added that the firm has seen its highest third-party flows this year to-date since Massachusetts Mutual Life Insurance Company (MassMutual) integrated its institutional affiliates under the Barings name in 2016.
A third of Barings’ global third-party AUM is generated from Asia Pacific clients, he said, although he declined to provide details on how much the third-party flows were.
He did, however, highlight some themes that the fund had spotted in the region, which included environmental, social and governance (ESG) engagement, offshore allocations, equity thematics, income replacement strategies, and an increasing appetite for alternatives such as private credit and real assets.
Most Asia Pacific investors have a strong home-country bias in their asset allocation, he noted, which requires time to be diversified and adjusted.
“That said, our expansion in the region includes further investment and growth, both organically through hiring and potentially inorganically through acquisitions to ensure that we are able to meet the evolving needs of our clients,” he said, without providing more specifics.
Robertson also revealed that the firm aims to open its Singapore office in November. The firm first announced its plans for a Singapore office last year, which will comprise four investment professionals and three non-investment professionals.
There will be plans to expand in the coming years, the firm said, but declined to comment on its latest progress on the hiring.
The Singapore operations will be led by SooHai Lim, managing director and head of Asia Equities ex-China, who will relocate to Singapore from Hong Kong. Lim joined the firm in 2005.
The firm declined to provide breakdown on its headcount but told AsianInvestor that the firm had over 250 employees in Asia Pacific as of the end of July. It has over 1,700 professionals worldwide.
More recently, Barings named Sydney-based Justin Hooley as managing director of the Asia Pacific private finance group, effective September 1. In his new role, he is responsible for origination, underwriting and managing private credit investments in Asia Pacific’s developed markets.
Barings is among a wide range of institutional investors who have made moves to expand in the region. For instance, HSBC has said it will be doubling down on Asia in the coming years, and its asset management arm will be increasing its high-net-worth product range to target mainland China, India and Southeast Asia.
Several asset managers such as NNIP, BNP Paribas AM and Schroders have also targeted Singapore, setting up sustainability hubs and hiring teams in the city-state.
According to a PwC report, Asia Pacific AUM is set to grow faster than any other region globally and is expected to reach an estimated $29.6 trillion by 2025, making it a fifth of expected global AUM ($145.4 trillion).
China, in particular, is set to lead growth in the region. AUM in China grew 34.0% in 2020 and net inflows increased 21.8% year-on-year, according to a Cerulli Associates's report published on August 11.
Last year, AUM in the region’s two financial hubs also grew significantly: 17% in Singapore, driven by fintech, alternatives and traditional investment strategies; and 21% in Hong Kong, boosted by a growing wealth management market.
However, another report released in July by Boston Consulting Group found that AUM grew fairly equally across all regions last year. North America, the region with world’s largest asset management market, saw AUM increasing by 12% to reach $49 trillion. Growth was also strong in Europe (10%), Asia-Pacific (11%), and the Middle East and Africa (12%).
This article has been edited to clarify that Asia Pacific is expected to be a key driver of growth but does not currently account for the highest growth among all regions for the firm.