How GSAM and Western showed their institutional mettle
In April, AsianInvestor revealed the winners of its annual Asset Management Awards. The biggest prizes are the Marquee Awards, which go to the leading institutions across key areas of the investment industry.
Our decisions were based on a blend of quantitative and qualitative research, including feedback from third-party sources.
Below, we detail the outstanding institutional product approach that netted Western Asset Management an award; delve into the institutional solutions strengths of Goldman Sachs Asset Management; and reveal why LGT Capital Partners continues to appeal in the alternatives space.
Best Institutional Product/Strategy
Western Asset Management
As 2016 progressed, fixed income continued to gain appeal. However, minute yields and the increasingly complex world that combined negative interest rates in some markets with the increasing promise of US rate hikes also led investors concerned about having enough flexibility to gain decent returns. That led to the rise of popularity in unconstrained fixed income strategies.
As its name implies, the strategy basically ignores benchmark indexes and invests wherever it sees potential value, be it in US investment-grade bonds, European bank loan portfolios or emerging market debt.
Western Asset Management was a particularly skilled proponent of the strategy last year. It developed a range of strategies that grew to more than $20 billion by end-2016, with the Global Multi-Sector and Macro Opportunities among the most successful.
The first was first created in the mid 1990s and mixed higher-yielding credits with a global focus, while the latter concentrated on a high-volatilty, macroeconomic-focused approach that has tended to recently focus on junk-grade investing. Last year they featured sizeable standard deviation rates of 6.81% and 6.36%, respectively, and good returns (7.33% and 8.63%, respectively).
The Macro Opportunities fund in particular stood out as an indicator of Western’s capabilities. Initially introduced as a customised client solution it expanded to the entire client base and gained popularity as the purest means of letting Western’s chief investment officer invest in an unconstrained manner. Flexibility is high: it can invest up to 50% in high yield or emerging markets, and up to 25% into foreign exchange.
The strategy's assets rose 11% in 2016 to $8.2 billion AUM by December 31. For investors keen to get more juice on their fixed income investments, and willing to give Western’s CIO the space he needs to make his picks, it’s proven a shrewd bet.
Best Institutional Solutions Provider
Goldman Sachs Asset Management
For yet another year, Goldman Sachs Asset Management can rightly point to the professionalism with which it engages Asian institutional clients.
The US asset manager boasted a variety of successes during 2016. While it didn’t claim any elephant-sized new mandates, it did enjoy multiple smaller wins across the region. Examples included its work with a sovereign wealth fund on a multi-asset partnership, while it added a sizeable chunk of capital across asset classes managed on behalf of a sophisticated pension fund operator.
GSAM also built some innovative solutions, including launching the Central Banks Initiative to offer the region’s foreign-currency reserve managers some new investment insights, particularly in Southeast Asia.
Other areas of success included adding to existing mandates with a central bank and a supranational client.
But of particular note was its engagement with insurance companies across the region. Here GSAM enjoyed a variety of mandate successes as it offered long-term solutions to build stable, diversified portfolios that met insurers' asset-liability management needs.
Examples included a private equity mandate in Australia, a large fixed income mandate with a Chinese insurer and a multi-asset portfolio awarded by a big insurer in Japan. GSAM also enjoyed successes in Hong Kong, Korea and Taiwan.
Moreover, in November the firm added a new resource for Asia-Pacific institutions: a new website offering insights, solutions and client case studies. Most importantly, the site's My Workspace section provided real-time access to portfolio information, performance and risk analysis.
Look out for our final marquee award writeups, in which we will reveal why we chose our top alernatives manager, Asian fund house and overall asset manager. In addition:
Click here to learn why Citi was named the best asset services provider and best consumer bank
Click here to discover why UBS was the region's top private bank and JP Morgan offered the leading retail product
Click here to learn why Hermes EOS was the best ESG Strategy Adviser and why Amundi's business development most impressed
Click here to see why State Street Global Advisors' exchange-traded funds stood tall, and why Zeal Asset Management offered Asia's best hedged strategy.