LGIM moving Asia equity management to Hong Kong
Five years after launching its presence in Asia, Legal & General Investment Management is committing more resources to the region, in a move seen by industry observers as a strong statement of intent.
LGIM, part of UK insurer Legal & General, has hired Danny Kwok as its first Asia-Pacific head of equity trading, its first dealer in the region. It is also transferring the management of several equity index funds from London to the firm’s fund managers in Hong Kong
Kwok joined in the trading role on June 12, reporting to Ed Wicks, global head of equity trading. Kwok previously worked for HSBC Global Asset Management in a senior trading capacity, responsible for daily order flow in cash equities and equity derivatives. Between 2007 and 2011 he was employed by Macquarie as an equity derivatives trader.
With its Asian operational and trading capability in place, LGIM transferred the trading and execution for all Asian equity orders to the region, effective July 26.
During the fourth quarter 2017, the investment management of multiple equity index funds will also be transferred to the firm’s fund managers in Hong Kong, along with equity derivative orders. The funds are currently managed by equity index teams in London and Chicago, which oversee a combined $290 billion of assets.
LGIM Asia now has a team of 10 in Hong Kong, servicing institutional clients in the region. Fund manager Kelvin Tong relocated from LGIM in London to Hong Kong last year. This came after Paul So joined in May 2014 in Hong Kong tasked with building an index funds team.
Commitment to clients
A Singapore-based consultant with long experience of the asset management industry told AsianInvestor: “LGIM’s move makes a lot of sense. It demonstrates serious commitment to growing the business in Asia.”
There is no significant performance advantage to be gained from putting Asia equity portfolio managers or traders in Hong Kong, added the consultant, who asked not to be named. After all, he noted, other large fund houses, such as Schroders, have long had a presence in the region but retain big Asian equity trading and portfolio manager teams in London
“So the idea of basing managers and traders in Hong Kong is not compelling enough purely for performance reasons,” he said. “This is more down to building a local presence and commitment to clients in the region.”
A former equity fund manager also saw LGIM’s transfer as a positive move, as it facilitates coverage in the local time zone. “It also looks more credible if they have any ambition in the region,” he added.
LGIM launched its Asia business in 2012 under Alan Flynn – as first reported by AsianInvestor – to provide investment solutions to the regional pension and retirement savings market.