EFG AM sets out on Asia buildout, eyes retail

EFG Asset Management is seeking to quadruple Asia AUM within three years, with several key hires in the pipeline and plans in place to enter the retail funds market.

The firm, the $7.6 billion affiliate of Zurich-based private bank EFG, has close to $1 billion in the region, where its 18 staff serve professional investors out of Hong Kong and Singapore.

The bank launched its AM unit three years ago, with a soft launch in Asia 18 months ago. This year it secured type 1 (dealing in securities), type 4 (advising in securities) and type 9 (asset management) licences in Hong Kong, and a Capital Markets Services licence in Singapore.

In June its Asia head of business Bradley Okita left the firm and was replaced by Nigel Sze as Asia CEO based in Hong Kong, as reported. At the same time EFG AM promoted Harmen Overdijk as its new head of investments for Asia.

The previous month EFG AM had hired Mansfield Mok to establish an investment capability in Asian equities. He joined from GAM, where he had been a senior fund manager with co-responsibility for the GAM Star China Equity Fund.

Subsequently EFG AM has added Andrew Lee as Asia COO, having previously been head of institutional sales for Legg Mason based in Hong Kong. And it has hired Chris Shiu as a portfolio manager, having worked as an analyst with Goldman Sachs based in Beijing.

Sze tells AsianInvestor that the firm is continuing to hire and is about to announce a fixed income portfolio manager to be based in Singapore as well as an institutional sales person. He expects to have 24 staff in the region by the middle of 2013.

He estimates that of its close to $1 billion in Asian assets, 70-80% is discretionary management for existing high-net-worth clients from EFG private bank. “It is obviously a target of ours to serve the institutional market,” says Sze.

“What we are trying to do is to build a name and an approach and to gain confidence from a universe of clients. We do need to drive the business further to gain more momentum.”

EFG Asset Management also has a stable of 12 funds under its New Capital banner. Its flagship is the New Capital Wealthy Nations Bond fund, which Sze says has attracted $1.2 billion.

This August it also launched the New Capital China Equity Fund, an open-ended vehicle that invests in up to 50 Chinese and Hong Kong stocks, managed by Mok.

Sze notes that EFG AM hopes to register funds in the local market and has applied to register funds in the Capital Investment Entrant Scheme in Hong Kong and its equivalent in Singapore. It also hopes to be able to tap the independent financial adviser (IFA) market next year.

The third part of its offering, after discretionary management and mutual funds, is specialised products; Sze cites the example of a pre-IPO China fund it launched last year with Atlantis Investment Management, whose chairwoman is Liu Yang or “China’s Lady Buffet”.

“By 2015 we are expecting this business to grow to $4 billion, mostly by serving EFG clients to begin with but gradually going external as well,” adds Sze.

Asked how important Asia is for the business globally, he replies: “This is where the growth is. Everywhere has headcount restraints, but Asia has been able to enjoy more freedom. This is where the opportunities are.”