SEI makes Asia inroad for multi-manager product

SEI Investments, a fund manager and administrator based in Oaks, Pennsylvania, has broken into the Asian market with its multi-manager platform via a strategic partnership with HSBC Republic.

This will let the private bank offer a manager-of-managers platform alongside its existing suite of single-manager products such as hedge funds.

Vincent Chu, regional managing director at SEI in Hong Kong, says once this partnership is established, SEI will look to expand distribution with other parties, although with a service arranged differently, so as to preserve a customized programme for HSBC Republic.

"It's easy to find a distributor," Chu says. "You can go to any bank or securities firm and offer a commission. But this is not a straightforward product, but a managed programme for clients." SEI will provide HSBC Republic clients a variety of investment strategies based on their risk and return appetites.

An official at HSBC Republic in Hong Kong says multi-manager funds offer another choice to customers, one with a lot of flexibility. The private bank is not reducing its existing product shelf, however, as many clients will continue to want to use single products as well. The banker notes multi-manager funds is a global trend and HSBC Republic wanted to ensure it was keeping up.

Multi-manager funds is a huge trend in the United States and rapidly growing in Western Europe, with some $500 billion of multi-manager assets globally, a figure that could hit $1 trillion by 2007, according to Cerulli Associates in London.

The product has been slow to develop in Asia, however, with only Frank Russell making a dent: it sources $1.5 billion from Japanese institutions and $500 million from Singaporean retail investors. Other multi-manager giants such as SEI and Northern Trust Global Advisors have been trying to figure out a way in. (For an in-depth look at multi-manager strategies in Asia, see AsianInvestor magazine's April/May 2003 edition.)

SEI does run some multi-manager accounts for institutional investors in Korea, but most of that business is still traditional, single-strategy management. Now, however, it will debut its partnership with HSBC Republic in Hong Kong and Singapore, as well as Switzerland, with plans to expand it to the United Kingdom, Latin America and European offshore centres.

SEI administers $235 billion of mutual fund and pooled assets, manages $85 billion of multi-manager assets and processes about $50 trillion of investment transactions annually. HSBC Republic manages $195 billion of client assets worldwide.

The new service tailored for HSBC Republic is called Strategic Investment Solutions and intends to marry the private bank's client relationship management expertise with SEI's knowledge of portfolio management and evaluation. The two parties began talks about a year ago, and over the course of 2003 dedicated resources to tailor the programme for HSBC Republic.