The marquee award winners of 2021, explained (part 1)

BEST ASSET SERVICE PROVIDER
HSBC

Combining deep regional reach with a global custodial network, HSBC’s securities services operations continued to impress clients and meet their needs over a difficult 2020.

The bank had reorganized its divisions, combining global markets and securities services in March 2020, to help identify trading and settlement liquidity and efficiencies across its operations. That has been designed to offer investors a more holistic array of support from front to back office, something that often proves particularly useful in emerging markets, including China.

HSBC had conducted the merger of divisions just ahead of the onset of Covid-19, and it was put to the test as the bank had to shift 90% of its team to work from home for most of the year, with the stresses and technological stresses that this entailed.

Nevertheless, it did so smoothly, while supporting concerned clients during the market difficulties of March and April in particular. It also grew its business, enjoying over 500 new mandates and registering a healthy expansion in assets under custody.  

Other areas of growth and innovation include HSBC launching an ESG portfolio reporting service, to assist the growing number of fund managers and asset owners that want to ensure their sustainability investment vehicles and data are well supported.

Other areas of note included HSBC supporting the first variable capital company in Singapore to track the FTSE Chinese Government Bond Index, and the first feeder ETF to take advantage of the streamlined master feeder regulatory regime in Hong Kong.

BEST BUSINESS DEVELOPMENT
CSOP Asset Management

Despite a sometimes-torrid year, CSOP Asset Management continued to build out its business during 2020. The Chinese fund manager saw its assets under management soar by 68% across the year to reach over $10 billion, in part as assets surged in China and Hong Kong, but also courtesy of it launching more than 10 new products during the year.

The company also trod new geographic ground, becoming the first Chinese asset manager to expand direct operations to Singapore when it listed its first exchange-traded fund in the city state. The transaction became the city state’s largest in terms of assets under management. Meanwhile CSOP was also the first fund manager to list an ETF in mainland China, under the Hong Kong-Shenzhen connect scheme.

It was busy on the active investing side too, gaining several mandates from Chinese insurance companies. This included its flagship equity mutual fund product, which invests into undervalued and high growth stocks in China. The strategy returned 40% in 2020, versus return of 23% for the MSCI China index.

On the fixed income side, CSOP’s Shen Zhou RMB fund offered a 12-month return of 4.12% by September 30, 2020, marking it as the top performer among over 30 RQFII peers.  

The strong ETF array and active management have helped CSOP gain clients outside of China and Hong Kong, and it now boasts investors from the Middle East, Europe and the US, as well as gaining Southeast Asian clients as a result of the new Singapore ETF.

BEST HEDGE FUND MANAGER
Longlead Capital Partners

Boasting a history of just six years, Longlead Capital Partners has quickly established itself to become a notable hedge fund in Singapore.

The long/short manager has two fundamental strategies for wholesale and institutional clients, which it has marketed to investors across Asia, Australia, Europe and the US.

2020 was a trying year for many funds, and a difficult one in which to gain new customers. However, while Longlead’s assets under management did not really change it saw its revenues soar and profits comfortable rise above 150% for the year.

This was due to the two strategies producing consistently good returns for its clients. Its Market Neutral fund offered healthy double-digit returns after fees, a major level of outperformance when compared to the Eurekahedge Equity Market Neutral Hedge Fund Index’s return of 3.31% for the year. Meanwhile Longlead’s Absolute Return fund returned over 25% net of fees, comfortably ahead of the Eurekahedge Asia Pacific Long Short Equities Hedge Fund index, which rose by 21.5% last year.

All-told, Longlead only saw negative investment performance for its two funds for two months of 2020, despite the marked volatility during periods of the year.

The strength of the business led Longlead to launch the Pan Asia Absolute Return Fund in late 2020 as an Australian domiciled unit trust, which lets investors in the country invest into its absolute return strategy using a hedge Australian dollar share class.

BEST INFRASTRUCTURE MANAGER
QIC

The infrastructure asset class is gaining increasing favour with institutional investors seeking to better diversify their portfolios. QIC’s global infrastructure has been quick to take advantage, despite sometimes rocky conditions.

Between November 2019 and early 2021 the Australian organization made seven new acquisitions, raising its total to around 20. These included investments into Brussels airport and Enwave Energy. Meanwhile it has been staffing up too, adding 18 new hires since December 2019 including in the energy, utilities and sustainability areas.

While the value of infrastructure portfolios is hard to assess, given their inherently illiquid nature, QIC estimates that the value of its assets under management rose above its pre-Covid levels of the mid-teen billions on an Australian dollar basis, with the company likely adding another A$2 billion or so in value due to acquisitions.

These new acquisitions included Pacific Energy, a provider of off-grid energy solutions to Australian resources companies; Brussels Airport; Generate Capital, a sustainable infrastructure platform; and the bolt-on acquisition of Hybrid Systems Australia to Pacific Energy in May 2020.

QIC’s approach has gained the support of its clients, with one former head of global infrastructure investments at a Japanese asset manager praising the company’s ability to bring in new assets and its research-based thematic approach to investing, which includes thought leadership articles.

BEST REAL ESTATE MANAGER
Nuveen Real Estate

As the investing arm of one of the US’s leading pension providers, Nuveen has long built an understanding of and exposure to a variety of asset classes, and it has long built expertise in property, via Nuveen Real Estate.

The company boasts a few dozen staff and several billion dollars of investments in the Asia Pacific region, invested across several strategies that include focuses on malls and multifamily buildings. Notably, it also has strong female representation, with close to 50% of regional staff being women and Louise Kavanagh being a relatively rare position of being a female Asia Pacific chief investment officer. She took the role last year and headlines more than 10 staff additions to NRE between the fourth quarter of 2019 and February 2021.  

NRE has particularly focused on its Asia Pacific Cities strategy since launching it in November 2018. The vehicle has raised well over $500 million from several investors, many of which hail from Europe.

It also looks set to have raked in appealing internal rates of return of well over 10% for 2020 on a US dollar basis, despite the lingering volatility and scarring on real estate markets caused by the Covid-19 pandemic and subsequent lockdown of many parts of regional economies.

BEST PRIVATE DEBT MANAGER
Ares SSG

Back in July 2020, Ares SSG was formed from the merger of SSG with Ares Management, to oversee the Asia operations of the latter. It’s fair to say the merger has enjoyed strong success from its inception.

The Ares SSG platform has seen its staff expand to over 100, half of which are investment executives. There were multiple senior hires, including Eric Vimont as managing partner and head of strategy, and John Knox as chairman for Australia and New Zealand, respectively.

It now boasts employees across eight cities in the Asia Pacific region, spanning from India to China, and down to Australia. They helped the company to originate loans from Australia, China, India, Hong Kong and Singapore across several industries and using a number of structures. All-told it enjoyed a very active year for both investment and divestment, which netted it good returns.

The company launched its third pan-Asia lending fund, called the Ares SSG Capital Partners Secured Lending Opportunities III, in April 2020 – right as collapsing debt markets were enjoying a resurgence. The fund was a big success, drawing close to $1 billion in commitments and gaining new investors including a US public pension fund and Middle Eastern sovereign wealth fund.