(May 8, 2014) — Investment managers looking to target growing institutional asset piles in burgeoning Asia-Pacific economies may be left disappointed, a white paper published this week has claimed.
Casey, Quirk & Associates said large investors, including sovereign wealth funds and other government-backed entities, were bringing their investment capabilities in-house, leaving fewer assets available for third-party managers.
The assets are sizeable and lucrative for those able to win them from their owners.
“Professionally managed investment assets in the Asia-Pacific region will surpass $14 trillion by yearend 2018—from $10 trillion in 2014—and produce $66 billion in fee revenue for asset managers worldwide over the next five years,” the consultants’ paper said.
Australia, Japan, and mainland China will represent two-thirds of the total revenue opportunity through 2018, followed by South Korea, Hong Kong, Singapore, Taiwan, and India, according to Casey Quirk. Of the $66 billion revenue total, those eight markets will represent a $51.4 billion opportunity from manager turnover, while $10.9 billion is projected to come from net new flows.
Asset managers who are native to the region will have to go on the defensive and adopt new strategies to keep up with increasingly sophisticated investor portfolios, the consultants said. Managers from outside the region, who may already operate these strategies, will have to adapt too, however.
“Global asset managers may have the edge currently on managing strategies that are increasingly in demand, but to be successful in the region they will need to adapt their investment and distribution capabilities to fit local needs,” the paper said.
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