Standard Life Investments to tap investment shift

The British asset manager plans big expansion in Asia as investors swing towards diversified products to look for better capital returns

PUBLISHED : Saturday, 02 February, 2013, 12:00am
UPDATED : Saturday, 02 February, 2013, 4:25am

Standard Life Investments, the US$270 billion investment management arm of British-listed life insurer Standard Life, is planning a major expansion in Asia to exploit investors' new-found appetite for diversified products.

Colin Clark, a director of global client group at Standard Life, told the South China Morning Post the company aimed to tap into the Asian market at a time "when yield has become less important and investors have started to look for capital returns in a range of products".

This offered expansion opportunities for the multi-asset manager in an environment of low returns and high volatilities, he said.

"This is the year Standard Life Investments will focus on Asia, after building up people and relationships in the last couple of years," said Clark, who admitted the firm was lagging a couple of years behind its counterparts in the United States in terms of business development.

He said the performance of the equity markets in the past decade could have left room for disappointment, creating a demand for multi-asset and absolute-returns products.

Clark said the firm planned to double the size of its workforce in Asia in the next three years, after increasing the headcount to 20 from just two in 20 months.

The company has US$2 billion in assets under management in Asia, but he declined to comment on the size the company is targeting.

About 75 per cent of the new capital raised last year came from outside Britain, mainly the US and Europe, according to Clark.

To demonstrate its seriousness in Asia, Standard Life has hired Allen Wang, a sales veteran at BlackRock, to head its Asia institutional sales unit, while investment director Malcolm Jones will be transferred from the head office in Edinburgh to take care of the region's absolute and fixed-income businesses.

In addition, the company is looking for someone to head its wholesale business.

Amid a rebound in risk appetite, Clark said Chinese investors might consider ploughing more into global equities and move away from the conservative global fixed-income products.

Chinese investors were also interested in absolute returns and European real estate, which could offer attractive upside as central banks the world over initiated more quantitative easing, he said.

"Client contact and sales forces are the first step of the build-up, which will be followed by operational staff," he said.

David Peng, the company's Asia chief, said Asia was benefiting from relaxation in monetary and fiscal policies, as evident from the moderate upturn in housing and infrastructure sectors.

"We are assessing different types of programmes to expand our reach into [mainland] China. We have a representative office in Beijing," said Peng, who joined the company from BlackRock in April 2011.

Standard Life plans to focus on strengthening institutional clients, including sovereign wealth funds and other insurance companies in the region.