First State looks to acquire asset managers in Asia

Colonial First State Global Asset Management is on the lookout for asset management acquisitions in Asian markets such as Taiwan and Korea, says its new CEO, Mark Lazberger.

Lazberger, who previously ran State Street Global Advisors' international business (ex-North America), joined the firm in March, moving from London to Sydney. He touched off a restructuring that now sees Asia report directly to him.

An acquisition would be valuable if it provided distribution to markets where the firm is not onshore, as well as help provide scale. First State Investments, the international unit of Colonial First State, has a big retail business in Hong Kong and Singapore, a presence in Indonesia and a joint venture in China with Cinda Asset Management. That's in addition to Colonial First State's large Aussie business.

First State Investments has transferred Michael Stapleton from London to Hong Kong to serve as regional managing director for Asia and Japan, following the decision by Lindsay Mann to eventually return to his native Australia.

Mann has led the firm's regional operations for eight years from Singapore, and had reported to Neil Cochrane, deputy CEO at parent Colonial First State Global Asset Management in Sydney. But Cochrane has also recently retired and now Stapleton reports directly to CEO Lazberger. Mann remains active with the firm in Singapore and his plans to return to Australia have yet to be finalised.

Stapleton has been with First State for 11 years, initially with the institutional sales team in Australia before moving to London in 2001 following the firm's acquisition of Stewart Ivory, a global emerging-markets equity boutique based in Edinburgh. First State has built its emerging-market capability largely around the existing Stewart Ivory team, which continues to be run by Angus Tulloch (with Asian equities overseen in Hong Kong by Martin Lau).

Stapleton says the short-term opportunity in Asia is retail, as well as institutions in Japan. The firm currently sources around $12 billion from Asian clients, including about $4 billion via securities company wholesalers in Japan. Its Hong Kong and Singapore business is majority retail, while it has institutional clients from other markets except Japan.

Over the medium term, the firm wants to boost its institutional business, and will beef up its sales and servicing capabilities in expectation of increased flows over the coming three-to-five years. First State is not looking to fill senior positions but gradually expand its teams, particularly with regard to China and Taiwan.

The other area it intends to grow is fixed income. In January Murray Collis assumed responsibility for Asian bond portfolios in Hong Kong, and the team has professionals in Singapore, Sydney and London.

"We think more Asian institutional investors will shift to Asian fixed income," Lazberger says. Noting that the firm has a big emerging-market equities team and a relatively small one for bonds, he says, "We want to demonstrate emerging-market expertise, full stop."

Lazberger will also be looking at whether the firm's direct infrastructure business in Australia and Britain will be of relevance to Asian investors, or can be replicated in Asia. In Australia the firm is also a direct investor in property.