GAM still looking to expand
Global Asset Management (GAM), a unit of UBS, had assets under management globally of $12 billion in January 2000. That figure now stands at $21 billion. This is significant growth by any measure. However, David Lam, managing director of Asian clients in Hong Kong, maintains that there is still room for expansion. In Hong Kong a sales team of eight looks after the region, a number he is looking to increase, despite having recently added ex-Goldmanite Alyce Su to look after Taiwan.
"We are always on the lookout for quality sales staff to expand our team here. Our focus remains on Hong Kong, Singapore and Taiwan. Taiwan has great potential that is not yet fully explored. We are also looking at Korea and China," Lam says.
He declined to quantify how much of that growth had come from Asia-based institutions or high-net worth clients, but notes about 10% of the firm's 600-strong workforce is in Hong Kong. GAM is a top-tier provider of funds of hedge funds in its home market, the United Kingdom.
In addition to its traditional focus on markets in the region, GAM is increasingly targeting Korean institutional investors, a few of which invest in hedge funds and funds of hedge funds, but it is not interested in selling such products onshore.
GAM is also keeping a careful eye on China, but Lam feels it is not yet time to make any concerted push there. "In China we have not made any specific commitment but we are watching developments carefully. Clients of private banks in China will see GAM's name on funds that they are offered. This is a way of getting our name known besides the efforts of our own internal sales force," he explains.
GAM was formed in 1983 and was acquired by UBS in 1999. From its beginning GAM has operated under the principle that no one firm can have all the best managers under one roof, and was a pioneer of the multi-manager style of investing. As a firm GAM has always aimed for absolute returns, it is not benchmark driven. Globally, 54% of its business is fund distribution to high-net worth individuals and institutions through private banks; 27% is managing high net worth individuals' wealth on a discretionary basis; the final 19% is managing institutional money.
Most of the firm's institutional clients in Asia are not life insurance companies, central banks, pension funds or endowments, most of which remain wary of hedge funds. Instead GAM targets that blurry world of corporate tycoons, where it's not quite clear whether the assets are an individual's or a company's.
Lam feels that there is a definite move back toward such investors trusting professional managers to manage their wealth. "There is no longer so much individual stock picking, day trading, or looking to IPOs to double your money in days," he says. In other words the investors that are GAM's target market are less interested in high risk, fast returns than in preserving what they have with the potential for upside. "People come to GAM for wealth preservation, not speculation," Lam states.