First State unveils EM debt team to fill product gap

First State Investments (FSI) has moved to fill a substantial product gap by establishing an emerging markets debt team in response to demand from institutional investors around the world.

The international arm of Colonial First State – Commonwealth Bank of Australia’s asset management business – has hired 30-year market veteran Helene Williamson from F&C Asset Management to lead this team.

She is due to start in September based in London, where she will be supported by four new investment specialists, as well as two existing staff based in Hong Kong on the firm’s global fixed interest and credit team.

“We have seen an increasing amount of interest for emerging market debt from existing client relationships and general discussions in the marketplace and felt that was a gap we wanted to fill,” says Michael Stapleton, FSI’s regional managing director for Asia and Japan.

“We are seeing genuine global interest from pension funds, sovereign wealth funds and insurance companies right around the world.

“There are more and more investors from Europe, North America and Australia either increasing their allocations or investing in emerging market debt for the very first time. And clearly institutions in emerging markets will continue to increase those exposures.”

He says FSI has been looking to provide an EM debt capability for some time on the debt side, and stresses that Williamson’s appointment is just the first step in developing that. “We will, in time, launch new products around this new team,” he adds.

While FSI’s Australian operation already has about $55 billion of assets in credit, fixed interest and cash, and FSI manages over $44 billion in Asia-Pacific and global emerging market equity funds, the firm has not had emerging market debt capabilities to speak of.

But Stapleton denies that what is happening in the US and European fixed income markets has acted as a trigger for this move. “The broad trigger is the increase in demand for emerging markets as an asset class both on the equity and debt side,” he confirms.

Asked why FSI has chosen London as the base for the bulk of its emerging markets debt team, Stapleton says it was a question of where the existing talent was.

“Most of the emerging market fixed interest talent is based in the UK, Europe and the US and there are very few firms which have a broad emerging market capability in Asia,” he notes. “Non-Asia is a very big part of the emerging market fixed interest space.”

Williamson will report to Gary Withers, the firm’s regional managing director for Europe, Middle East and Africa.

She joins FSI from F&C Asset Management, where for the past 15 years she was head of emerging market debt. This included five years as head of fixed income.

Prior to that, from 1978 to 1995 she was a senior trader and held several emerging markets roles from credit restructuring to portfolio trading at Bankers Trust Company in London and New York.