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SCMP Reporter

HSBC Asset Management, the global fund management arm of HSBC Holdings, is to re-open its Singapore office just three years after pulling the plug on a 70-man operation there.

 Tommy Thompson, chief executive of HSBC Asset Management, said: 'We are having discussions on the possibility of moving back to Singapore. It looks very attractive to us just now.'  The company will transfer at least $2.7 billion to be managed in Singapore and will set up a team of at least three full-time fund managers, once the move has received the go-ahead.

 'We have approached various people and are looking at which funds make strategic sense to transfer down there,' said a spokesman.

 The decision to return to the city state was made after the Singapore authorities announced last September that overseas fund managers would be permitted to manage a percentage of the Government's huge Central Provident Fund (CPF).

 The CPF is a compulsory pension fund for all Singapore citizens, financed by statutory contributions.

 Mr Thompson estimated that the move freed between $50 billion and $80 billion for overseas fund managers and presented an opportunity HSBC could not afford to miss.

 He denied that the move was an about-turn for the group. 'There has been a change of rules, which has forced us to re-evaluate,' he said.

 HSBC's decision to transfer funds and base full-time staff in Singapore was made to meet government rules for foreign fund managers who want to run CPF money.

 International fund management houses have to apply to the Monetary Authority of Singapore for a licence to manage government money.

 To be granted a licence, fund-management houses must have at least three full-time fund managers with professional qualifications or at least five years' experience between them.

 They must also manage at least S$500 million (about HK$2.7 billion) generated from non-Singapore sources and must have demonstrated consistent management for at least three years.

 Rosanna Lam, a director in the investment division in Hong Kong, is the present front-runner to head the Singapore operation.

 Mr Thompson said: 'Our preference is to make internal transfers, and Rosanna would be a logical choice.'  The Singapore Government's decision to free the CPF money surprised the fund management industry, although most leading international houses maintaining a presence in Singapore had no trouble meeting the authorities' guidelines.

 But having already pulled out, HSBC Asset Management found itself lagging behind rival fund management houses and missing an opportunity to increase funds under management and fee income.

 HSBC Asset Management has an office and administration centre in Singapore employing about 10 staff, but manages no money out of the Lion State and employs no full-time fund managers.

 Before pulling out of Singapore in 1992, HSBC Asset Management employed about 70 people responsible for managing its Singapore and Malaysia funds as well as approximately 100 private client accounts.

 The office was closed following a decision in 1992 to centralise HSBC's global fund management operations and revert fund management operations to Hong Kong.

 The rationalisation was praised by HSBC management as a way to avoid duplication in the group's global asset management operations.

 Mr Thompson denied that the Singapore move signalled a decision to decentralise fund management operations.

 'It will simply become part of the existing structure and essentially broaden our investor base,' he said.

 HSBC Asset Management was formed in January 1994 as the global parent company of HSBC's diverse fund management operations comprising James Capel Fund Managers in Europe, Wardley Investment Services in Asia Pacific and Marinvest in the United States.

     At present, it manages assets worth approximately US$31 billion.



Singapore return for HSBC team