As the Chinese market gradually recovers, more and more foreign institutions are showing a positive outlook on this market. The US asset management leader Federated Hermes recently expressed its intention to open an office in Hong Kong, China, aiming to strengthen its sales force in the Asia-Pacific market. Meanwhile, the British asset management giant M&G Investments is also considering promoting its business development through partnerships with local partners in China. Previously, South Africa’s largest asset management institution, Ninety One, also indicated that it was exploring the possibility of collaborating with local partners in China.
Federated Hermes plans to expand in the Asia-Pacific region, as reported by Fund Selector Asia, the company is considering establishing its new office in Hong Kong to accelerate its sales layout in the Asia-Pacific region. James Roland, Federated Hermes’s Asia-Pacific distribution chief, revealed these thoughts in a recent interview, emphasizing the importance of enhancing the company’s wholesale sales force in Asia.
Federated Hermes was founded in 1955 and is based in Pittsburgh, United States. As of the end of 2023, it managed assets totaling $757.6 billion, equivalent to approximately 5,473.7 billion yuan. The company is listed on the New York Stock Exchange. In May last year, the company announced that James Roland would take up the position of Asia-Pacific regional distribution chief, responsible for sales in markets such as Hong Kong, Singapore, Australia, Japan, and Southeast Asia, reporting to President Paul Uhlman.
Prior to joining Federated Hermes, James Roland served as head of international clients, possessing extensive experience in cooperating with top global financial institutions. He is not only familiar with but also has a deep understanding of the Asian market, enabling him to quickly formulate distribution strategies, and this year he has relocated from London to Singapore.
Roland also mentioned that although the plan to set up an office in Hong Kong is currently at an early exploratory stage, he believes that this step is crucial for supplementing the company’s regional sales capabilities. To achieve success in the Asia-Pacific region, Federated Hermes must establish a footprint in Hong Kong. At the same time, he emphasized that although they wish to maintain a steady pace for the office setup, recruitment will start immediately.
In Asia, Federated Hermes’s institutional sales performance is robust, and after initial preparations, the company has constructed an overall plan for its strategic clients. In terms of channels, private banking is a key focus of the company’s sales strategy in Asia, as it is the main source of wholesale sales revenue in the region. Additionally, the family office sector is a rapidly growing market, although it is not easy to enter. Mr. Roland had previously dedicated efforts to win over family office clients during his time at Janus Henderson and has deep insights into this. Despite challenges, he realizes that the Asian family office market is filled with potential opportunities.
In the current global economic environment, new wealth is emerging at a record pace, particularly in Asia, where the growth momentum of billionaires is strong. According to the latest statistics, by 2023, the number of independent family offices in Singapore has surged to 1,400, a 27% increase from the previous year. In Hong Kong, this number further cements its status as a family office hub in Asia.
Currently, the financial sector’s focus is on the wealth management ecosystem, which includes the crossover and synergy between private banking and family offices. Experts point out that if financial institutions can collaborate with family office groups and establish considerable business connections, it will positively drive the expansion of their private banking services, and vice versa.
As for the mainland China market, the emphasis is on leveraging offshore markets, such as Hong Kong, to serve and expand the mainland’s business landscape. Moreover, top asset management institutions from the UK are also making inroads into the Chinese market. South China Morning Post cites a McKinsey report predicting that China’s asset management market will reach a massive scale of 280 trillion RMB by 2030. As of May 2023, this figure is 130 trillion RMB, indicating its enormous growth potential.
The accumulation of individual wealth and the development of pension planning will aid fund companies in enhancing service capabilities and product quality. CEO of M&G Investments, Joseph Pinto, emphasized that they plan to enter the Chinese fund market and are actively exploring opportunities to collaborate with mainland Chinese investors. M&G Investments is a part of the well-known British wealth management group M&G, with assets under management amounting to 389.8 billion USD, equivalent to about 2816.3 billion RMB.
Former CEO Pinto revealed that the company will consider various collaboration models, including partnerships with Chinese enterprises. He noted that Chinese customers might initially prefer fixed income products, especially investment-grade fixed income products, as they are viewed as a more secure alternative to stocks. M&G is committed to providing clients with a diversified portfolio of investment choices.
On the other hand, as the largest asset management institution in South Africa, Ninety One’s founder and CEO Hendrik du Toit indicates that the company is optimistic about the potential and long-term value of China as an investment destination. Ninety One has already invested more than 10 billion USD in China. These investments are realized not only through emerging market strategies but also include specific China-focused strategies. Du Toit stresses that the company has a substantial presence in the Chinese market and is also seeking cooperation with local financial institutions.
For long-term investors, maintaining investment capabilities in China is a crucial part, considering that China is the world’s second-largest economy and has the potential to grow into the largest, making this point especially indispensable.
In the eyes of Hendrik du Toit, China plays an indispensable key role in the global supply chain. Despite the tumult and uncertainties in geopolitics, the supply chain systems of global leading companies remain closely connected with China.
During his visit to China, Du Toit had in-depth exchanges with several Western global businesses operating in China, discovering that these enterprises not only operate smoothly in China but also have no intention of reducing their ties with the Chinese market. On the contrary, they are actively increasing their investments in China.
More importantly, in the face of global issues such as climate change, finding solutions requires the collective strength of the international community, including China.
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