Pictet boosts Hong Kong retail offering

Jun 27, 2010

Having registered eight more funds to offer to retail customers, the Swiss asset manager is in talks to get on the shelves of more foreign and local banks in the city.

Geneva-based Pictet Funds yesterday said its third batch of funds for retail customers has been approved for sale in Hong Kong, and several major distribution agreements are pending that will provide the asset manager with more shelf space for its products.

The eight new funds will target low- and mid-tier, mass-affluent consumers, and therefore will require registration with the Securities and Futures Commission. Pictet already sells funds to high-net-worth clients on a private basis.

The newly approved funds (including their total assets under management and one-year performance to June 25) are: Pictet-Agriculture (€104.6 million; +41.35%), Pictet-Emerging Markets ($1.35 billion; +29.81%), Pictet-EUR Inflation Linked Bonds (€222.2 million; +6.92%, Pictet-Global Megatrend Selection ($358 million; +22.95%); Pictet-Indian Equities ($440.6 million; +31.70%) ; Pictet-Japanese Equities 130/30 (¥5.84 billion; +3.93%); Pictet-Middle East and North Africa ($21.4 million; n/a) and Pictet-World Government Bonds (€187.2 million; +17.66%)).

With regards to the choice of funds, Pictet expects investors to find the bond funds particularly useful in the current climate of market volatility, says Amy Cho, Asia-Pacific head of institutional and retail business development in Hong Kong.

The themed funds -- the agriculture and global mega-trend products -- reinforce Pictet's reputation as a strong thematic and sustainable-investments funds provider, she adds. The firm has been something of a pioneer in this area and offers products on themes from clean energy to timber to digital communications.

Meanwhile, the India, and Middle East/North Africa products should appeal to Hong Kong investors' strong appetite for emerging markets.

Of a total of more than 100 funds it manufactures, Pictet now has 33 funds registered for retail sale in Hong Kong -- two absolute-return funds, six bond funds, two cash funds, six developed-equity funds, seven emerging-market equity funds and 10 themed funds.

There's no AUM target for these funds, as they're not being IPOed, Cho tells AsianInvestor. The aim is to further support Pictet's distribution partners in Hong Kong, which want a range of products to choose from rather than just one or two funds, she adds.

Pictet has distribution agreements with banks such as ANZ (formerly RBS/ABN Amro), Bank of China, Citi and Standard Chartered. Partnerships with other major international and local banks are in the pipeline, says Cho. In the high-net-worth segment, Pictet partners with all the main global private banks, she adds.

When asked whether she is finding that distributors are being more selective and in some cases re-assessing their relationships with fund managers, Cho agrees that this is the case.

"It's quite an administrative burden to deal with many fund suppliers, especially if several of them supply only one or two specialist funds," she says. "So they are trying to streamline the number of partners they work with as well as the number of funds on their platforms."

But, at the same time, it's a good thing for an asset manager to offer a comprehensive range of funds in order to be able to best fill product gaps that distributors might have, adds Cho.

As at March 31, Pictet Asset Management had $121.3 billion under management.