NN IP cuts EM equity desk amid business-wide review
NN Investment Partners is cutting back its emerging market equity team – most of which is in Singapore – and repositioning the desk’s products, which have struggled to achieve decent scale.
Four professionals are leaving the Dutch fund house as a result, while two will remain in place for the time being.
The plan is for Nomura Asset Management, a partner firm to NN IP, to become the delegated portfolio manager for NN IP’s Asia Income and Greater China funds by May next year, said NN IP spokeswoman Caroline Wroblewski.
Meanwhile, the firm's global EM equity and EM equity opportunities funds will be shifted into a global EM sustainable enhanced index solution, in cooperation with another partner, Irish Life Investment Managers, Wroblewski told AsianInvestor by email.
The four products in question – the global EM fund, EM equity opportunities fund, Asia income and Greater China funds – have aggregate assets under management of $550 million out of NNIP's total AUM of €240 billion ($279 billion).
Singapore-based Asian equity portfolio managers (PMs) Dan Huang and Colin Liang will exit within the next month, while The Hague-based senior investment analysts Vivek Bhutoria and Koay Siuchoon left in July, Wroblewski noted.
Huang has been with NN IP since March 2009, Liang since March 2015, Bhutoria since July last year and Koay since 2016, according to their LinkedIn profiles.
Ashish Goyal, head of the EM team, and Kannan Venkataramani, senior Asian equity PM, will remain to oversee various funds until around April or May 2019 while NN IP’s “intended solutions are being implemented”, she added.
“Upon formal implementation of the changes we will jointly review the next steps,” said Wroblewski.
Multiple industry sources expect Goyal and Venkataramani, both based in Singapore, to move on at that point.
Goyal joined the Dutch firm in September 2014, while Venkataramani has been with NN IP since 2015. Both had previously been long-standing employees of Eastspring Investments, British insurer Prudential’s Asian funds arm.
GLOBAL BUSINESS REVIEW
The EM equity team changes come as part of a review of NN IP’s business globally.
As a result of a “changing and challenging market environment for active fund managers”, NN IP moved to “redefine its focus areas, restructure its investment organisation and concentrate its product lineup”, wrote fund research house Morningstar in a client note dated May 31.
NNIP – formerly ING Investment Management – has its roots in fixed income, which will continue to be its core capability, said the note.
However, the review has significant implications for NN IP's equity arm, Morningstar added. The fund house earmarked European equities and environmental, social and governance (ESG) investing as its key equity strategies, but other equity strategies are subject to review and could be merged, managed through a partnership, or managed systematically using a quantitative approach.
With the restructuring, NN IP aims to free up resources to invest in its European equity and ESG/impact teams, added Morningstar.
Wroblewski said the review “is an exercise to help better focus our efforts in areas we have designated as our core capability and decide how the strategies in question can be continued in the best possible way for our clients”.
Other recent departures as a result of the review are those of Michael Lipsch and Andrej Antonijevic, portfolio managers for European real estate strategies who left on June 30.
"SENSIBLE MOVE"
Morningstar said in its May note that NN IP's decision to critically review its capabilities and product lineup is “sensible” and that the fund manager should focus on its strengths, in the form of core fixed income, high yield, emerging-market debt, multi-asset, real estate and sustainable equity.
However, Morningstar added that NN IP might go through a turbulent period as these “drastic measures” could unsettle employees.
NN IP joins a growing list of asset managers to have made cutbacks in Asia in the prevailing tough environment, which has also driven a trend towards consolidation in recent years.
Other moves include Axa Investment Managers shutting its multi-asset desk in Hong Kong earlier this year, while last year, AMP Capital dismantled its Asia equity team, and BlueBay Asset Management and EII Capital Management both closed their Asian offices.