China is a mid-term project for Legg Mason
On the distribution side, the firm is focusing on Hong Kong, Singapore, and Taiwan. China is likely the next major target.
Legg Mason, which is among the worldÆs largest fund management companies with close to $1 trillion in assets under management, is looking to Asia for further growth opportunities.
ôWe are very large in the US,ö says Lennie Lim, managing director and head of Asia distribution at Legg Mason Investments in Singapore. ôThe next opportunity is in Asia. We have plans to grow the business here, especially in places like Hong Kong, Singapore, and Taiwan, where we already have existing offices.ö
Legg Mason Investments is the principal distributor of portfolios of Legg Mason and its affiliates in Asia. Legg Mason is headquartered in Baltimore and owns eight asset specialists: Legg Mason Capital Management, Western Asset Management, Private Capital Management, Royce & Associates, Brandywine Global Investment Management, ClearBridge Advisors, Permal, and Batterymarch Financial Management. In Asia, the group acquired a distribution platform from Citigroup Asset Management in 2005.
In the slightly longer term, Legg Mason Investments plans to turn its attention to China. ôWe are excited about China. ThatÆs where we expect to see a lot of growth for the company,ö Lim says.
In January, Legg Mason and Citibank in China launched a qualified domestic institutional investor (QDII) offering, the Legg Mason Global Funds PLC. The offering consists of six mutual funds with an investment focus across global equity and fixed-income markets. That launch marked the first partnership of Legg Mason with a bank in China, and was the first QDII offshore mutual funds launch in 2008 by any bank in China.
The six mutual funds, which are available to Citi's high-net-worth clients, are the Legg Mason Value Fund, Royce US Small Cap Opportunity Fund, Batterymarch Pacific Equity Fund, Brandywine Global Equity Fund, Western Asset Global Multi Strategy Fund and Western Asset Global High Yield Bond Fund.
In Hong Kong and Singapore, Lim sees major growth opportunities in the private-banking market.
ôSingapore and Hong Kong, in particular, have done a very good job in terms of attracting regional offices of international banks. Perhaps Singapore is slightly ahead. I see Singapore as the Switzerland of Asia,ö says Lim, who used to be ABN Amro Asset ManagementÆs CEO in Singapore prior to joining Legg Mason Investments in July last year.
Lim says the range of products offered by Legg Mason Investments in Asia are ideal for private-banking clients who are looking for a strong brand name, performance track record, and support services that are on the ground.
ôPrivate banks and insurance companies are very sophisticated investors. They will have gatekeepers that function as consultants. They will do the due diligence of our products and they will try to suggest a very balanced portfolio to their clients,ö Lim says.
Western Asset Management, for example, is a popular choice among private bankers looking for fixed-income products among Legg MasonÆs offerings. With more than $600 billion in assets under management, Western Asset Management makes up 60% of Legg MasonÆs total AUM of $998.5 billion.
It is in the retail market that Legg Mason Investments needs to expand its reach.
ôBranding is very important in the retail space,ö Lim says. ôWe realise that we are newer to the market compared to some of our competitors. Our brand recognition in the retail market may not yet be established at this stage.ö
To improve its retail market share, Legg Mason is focusing on its relationship with distributors. It tries to get an edge over other fund manufacturers by providing better support services.
ôWe need to deepen our footprint with the distributors,ö Lim says. ôI always tell our product and sales teams here that they must always have a good relationship with our clients, who are fund distributors. It is important that we always provide full support services for our retail products.ö
Retail investors in Taiwan tend to be more aggressive than those in Hong Kong and Singapore, Lim says. ôThey tend to have a higher risk appetite. We are seeing a big shift as they are now more in favour of putting their money in cross-border funds.ö
Legg Mason Investments isnÆt rushing to have a physical presence in other markets in Asia, however.
ôWe are being very careful. We are already $1 trillion in assets so thereÆs really no big rush to grow our asset pool,ö says Lim. ôNow everybody is excited about China, as are we, but we donÆt want to be rushing in just because our competitors are going there.ö
With regard to the QDII partnership with China, Legg Mason had ôlong discussions with Citibank", says Lim. ôWe wanted to make sure we share the same vision about China. China tends to be more of a trading market, but we wanted to make sure that we had proper investment planning.ö
In line with its push to expand globally, Legg Mason named Ronald Dewhurst as senior managing director and head of international asset management last month. Dewhurst is responsible for planning and executing Legg MasonÆs global growth strategy and will be working with the firmÆs investment subsidiaries and distribution units throughout Asia, Europe, and the Americas.
ôWe are very large in the US,ö says Lennie Lim, managing director and head of Asia distribution at Legg Mason Investments in Singapore. ôThe next opportunity is in Asia. We have plans to grow the business here, especially in places like Hong Kong, Singapore, and Taiwan, where we already have existing offices.ö
Legg Mason Investments is the principal distributor of portfolios of Legg Mason and its affiliates in Asia. Legg Mason is headquartered in Baltimore and owns eight asset specialists: Legg Mason Capital Management, Western Asset Management, Private Capital Management, Royce & Associates, Brandywine Global Investment Management, ClearBridge Advisors, Permal, and Batterymarch Financial Management. In Asia, the group acquired a distribution platform from Citigroup Asset Management in 2005.
In the slightly longer term, Legg Mason Investments plans to turn its attention to China. ôWe are excited about China. ThatÆs where we expect to see a lot of growth for the company,ö Lim says.
In January, Legg Mason and Citibank in China launched a qualified domestic institutional investor (QDII) offering, the Legg Mason Global Funds PLC. The offering consists of six mutual funds with an investment focus across global equity and fixed-income markets. That launch marked the first partnership of Legg Mason with a bank in China, and was the first QDII offshore mutual funds launch in 2008 by any bank in China.
The six mutual funds, which are available to Citi's high-net-worth clients, are the Legg Mason Value Fund, Royce US Small Cap Opportunity Fund, Batterymarch Pacific Equity Fund, Brandywine Global Equity Fund, Western Asset Global Multi Strategy Fund and Western Asset Global High Yield Bond Fund.
In Hong Kong and Singapore, Lim sees major growth opportunities in the private-banking market.
ôSingapore and Hong Kong, in particular, have done a very good job in terms of attracting regional offices of international banks. Perhaps Singapore is slightly ahead. I see Singapore as the Switzerland of Asia,ö says Lim, who used to be ABN Amro Asset ManagementÆs CEO in Singapore prior to joining Legg Mason Investments in July last year.
Lim says the range of products offered by Legg Mason Investments in Asia are ideal for private-banking clients who are looking for a strong brand name, performance track record, and support services that are on the ground.
ôPrivate banks and insurance companies are very sophisticated investors. They will have gatekeepers that function as consultants. They will do the due diligence of our products and they will try to suggest a very balanced portfolio to their clients,ö Lim says.
Western Asset Management, for example, is a popular choice among private bankers looking for fixed-income products among Legg MasonÆs offerings. With more than $600 billion in assets under management, Western Asset Management makes up 60% of Legg MasonÆs total AUM of $998.5 billion.
It is in the retail market that Legg Mason Investments needs to expand its reach.
ôBranding is very important in the retail space,ö Lim says. ôWe realise that we are newer to the market compared to some of our competitors. Our brand recognition in the retail market may not yet be established at this stage.ö
To improve its retail market share, Legg Mason is focusing on its relationship with distributors. It tries to get an edge over other fund manufacturers by providing better support services.
ôWe need to deepen our footprint with the distributors,ö Lim says. ôI always tell our product and sales teams here that they must always have a good relationship with our clients, who are fund distributors. It is important that we always provide full support services for our retail products.ö
Retail investors in Taiwan tend to be more aggressive than those in Hong Kong and Singapore, Lim says. ôThey tend to have a higher risk appetite. We are seeing a big shift as they are now more in favour of putting their money in cross-border funds.ö
Legg Mason Investments isnÆt rushing to have a physical presence in other markets in Asia, however.
ôWe are being very careful. We are already $1 trillion in assets so thereÆs really no big rush to grow our asset pool,ö says Lim. ôNow everybody is excited about China, as are we, but we donÆt want to be rushing in just because our competitors are going there.ö
With regard to the QDII partnership with China, Legg Mason had ôlong discussions with Citibank", says Lim. ôWe wanted to make sure we share the same vision about China. China tends to be more of a trading market, but we wanted to make sure that we had proper investment planning.ö
In line with its push to expand globally, Legg Mason named Ronald Dewhurst as senior managing director and head of international asset management last month. Dewhurst is responsible for planning and executing Legg MasonÆs global growth strategy and will be working with the firmÆs investment subsidiaries and distribution units throughout Asia, Europe, and the Americas.
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