Kasikorn AM building cross-border business
Kasikorn Asset Management, Thailand’s biggest fund house by assets, is seeing domestic demand rising fast for international assets and also plans to build capabilities with a view to launching Asean-wide products.
Feeder funds providing foreign exposure were by far the firm’s fastest growing business last year. Kasikorn AM has Bt95 billion ($2.9 billion) in these products, giving it a 44% market share as of end- 2014, up from 27% the year before.
The firm took in flows of $1 billion into one product alone – a BlackRock global allocation fund – in 2014. “We’ve never seen that sort of figure before,” said Navin Intharasombat, first senior vice president.
And in December it closed a global healthcare fund managed by JP Morgan Funds at $116 million within a day, which was also a record flow in such a short time. In the past, Kasikorn would have been very happy to raise $30 million through an IPO for a foreign investment fund, said Navin.
He sees this trend continuing. A mere 6% of mutual fund investments are in foreign assets (via feeder funds), he noted, a figure that the firm expects to grow to 10-15% in the next few years.
The Securities and Exchange Commission has relaxed rules – such as allowing non-rated fixed-income instruments in 2013 – to allow Thais more choice when investing offshore. At the individual or institutional client level there is no regulatory limit on how much they can allocate overseas through mutual funds.
Meanwhile, Kasikorn AM is looking to set up Asean-focused funds, with a view to making use of the recently launched Asean Collective Investment Scheme. “We are setting up teams to increase coverage of countries in the Asean region,” said Navin, but there is currently no concrete time frame for doing so.
As to whether the fund house would put a presence outside Thailand, he said it would take its cue from its parent, Kasikornbank. “If they decided to open in Singapore or Malaysia, we would follow them, but there are no plans right now.”
Meanwhile, Kasikorn AM has been exploring possibilities around agreeing overseas distribution partnerships, but does not yet have any in place.
Moreover, Kasikornbank is understood to have recently started to put foreign funds (other than feeder funds) onto its platform after partnering Swiss private bank and asset manager Lombard Odier in December last year.
Kasikorn AM posted overall AUM growth of 14.9% to Bt1.09 trillion last year, with the mutual fund segment increasing by 22.5%. The AUM of its institutional business was fairly flat in 2014, added Navin, because the firm had put a lot of focus on growing its mutual fund assets.
Other firms in Southeast Asia are also busy gearing up for the Asean passport scheme, such as Malaysia's Maybank Asset Management and Affin Hwang, and Thailand's SCB Asset Management.