Lippo targets asset management niche

PUBLISHED : Saturday, 18 September, 2010, 12:00am
UPDATED : Saturday, 18 September, 2010, 12:00am

New asset manager Lippo Investments Management (LIM) officially started operations this week, unveiling plans to create a niche for itself by offering funds made up of exchange-traded funds (ETFs).

It is targeting high net-worth clients and might roll out its first product next month to professional investors throughout the region. At some stage it will also seek to establish a platform for institutional money like the qualified domestic institutional investor scheme.

'Our mission is to become the top Asian owned and most innovative asset management company,' LIM chief executive Stanley Kwok said. 'We are using fund-of-ETFs across different asset classes as a vehicle to invest and this is our core strategy.'

ETFs are designed to track a specific benchmark index and trade like stocks, moving up or down according to the benchmark's performance. They have recently become more popular in Asia after first being introduced in Western markets nearly 20 years ago.

A fund-of-ETFs is considered a more active form of investment because it can be created by mixing and matching tracking funds across markets and asset classes to fit a specific trading strategy.

Danny Yan, from Taifook Asset Management, said investors would want to scrutinise the management fee structure of the fund-of-ETFs to see if they could make a decent return.

'It's not sexy to customers [if] they are just selling funds of funds,' Yan said.

A typical fund-of-ETF measuring one asset class could comprise about 20 to 30 different ETFs, LIM head of business and product development Sammy Yip said.

He added that LIM would set a sensible fee structure and 'will not be pricing our products at the high end'.

LIM has four senior management staff and will look to expand as its business grows.

Its namesake, Indonesian conglomerate Lippo Group, had supported its launch in areas including information technology and back-office work, Kwok said.

He said LIM would hope to leverage Lippo Group's presence in areas including Southeast Asia, Hong Kong, and Korea.