Henderson bounces back from tech fallout

“In Singapore we went from being a hero to a villain because of our technology funds,” says Alexander Henderson, managing director of Hong Kong and Singapore at the $145 billion Henderson Global Investors. Tech has been one of the firm’s key strengths, and in the dot.com boom days, Henderson bought a lot of new investors on board. Henderson will not provide numbers but says in the aftermath of the Nasdaq’s crash beginning in early 2000, a lot of retail investors lost money and pulled out.

But today the firm has recovered thanks to a series of new products and services, and has restored its assets under management. To return from zero to hero, Henderson emphasized fixed income, tactical asset allocation and property, and is now looking at other areas such as a fund of hedge funds or a small-cap fund.

Not of course that Henderson has abandoned its tech strength. “We’re trying to ensure that investors understand that tech should not be the base of a portfolio, but just a small if important part,” says Alex. “Singaporeans still love tech, although it is a harder sell in Hong Kong.”

Launching a global bond capability for Singapore investors was the first step back, a product the firm would like to also promote in Hong Kong as being a more efficient tool for a conservative investor than guaranteed mutual funds.

Henderson has also established a tactical asset allocation capability in Sydney with parent AMP. This has been a hit, giving investors access to a variety of equity and bond exposures while letting a professional determine the balance, Alex says. Furthermore he wants to slot new products such as a small-cap fund into this function.

Henderson is also now registering property and tech funds with Taiwan’s Securities and Futures Commission, where Alex says the regulator has become much more open and efficient about processing fund applications. The firm is in discussions with both international and local banks for distribution. “We'd like to have products in Singapore, Hong Kong, Taiwan and Korea,” he says, noting that Korea will likely be next year’s project.

Asia number one property

But perhaps the firm’s most successful business has been its other specialization besides tech, which is property investment.

Graeme Torre, director and head of property for Asia in Singapore, explains that the property market is rapidly changing, for both direct and portfolio investment. The firm established a joint venture with Keppel Land to run the Asia Number One Property Fund, which is still being marketed and will close this autumn. Its ultimate goal is to raise $300 million, although if it does not reach target, Henderson will close it to begin investing and seek additional financing later.

The Asia Number One will look chiefly at North Asia, including Japan, for all property assets, including listed property and development companies as well as direct stakes. The development of real-estate investment trusts in Singapore and Japan has also made investing in property more efficient and liquid. Moreover the markets have cheapened over the past year, and Henderson has argued to potential investors that the downside risk is limited.

Torre says Keppel brings its expertise in property construction and project management as well as its contacts around the region, while Henderson provides fund management skills, systems and resources.

Henderson also owns an 800-unit middle-income residential property development in Shanghai called Watara Gardens. Those units are now being sold.

“Asian property has always been closed, and it is now opening and governments are doing things to attract international investors," he concludes. "Things don’t happen overnight, though. Fund management is a long-term game.”