Acquisitions give Invesco more clout
Invesco (Asia) believes it will become a significant player in the Mandatory Provident Fund market.
The acquisition of Aetna Investment Management in 1995 and LGT Asset Management this year has given the group the kind of market clout that comes with size - funds under management worldwide total more than US$260 billion.
This growth has been well received by companies and organisations seeking managers for their retirement funds, according to Invesco marketing director Edith Ngan.
She cites the Hong Kong Jockey Club mandate won in 1996 as an example of the favourable market reception to the group's expansion strategy.
'We received a lot of invitations to pitch for accounts just one month into the LGT acquisition,' Ms Ngan said.
With MPF, Invesco counts among its advantages its long experience with 401 (K) defined contribution plans in the US.
A seven-member retirement services team based in Atlanta provided invaluable advice on planning issues and would continue to provide support to the Hong Kong operation once the scheme was active.
'They are very experienced in the educational aspects,' Ms Ngan said.
'They hold regular member briefings and have well- developed sets of educational materials which we can adapt to the local market. So we have a head start with experienced people who know what they are doing.' MPF is expected to involve a massive administration effort in keeping track of members' entitlements and investment choices.
Invesco has developed a highly-sophisticated administration system for its US operations but has yet to decide whether to do its own MPF administration or bring in a third-party supplier.
The main thrust of Invesco's MPF marketing plan will be to provide MPF services to the existing retirement fund market.
'We have quite a significant market share among the second tier of retirement fund managers,' Ms Ngan said. 'We will have our own brand product aimed at our existing client base and also to market outside that base.
'As a fund manager, we don't see ourselves going out as aggressively as the banks or insurance companies. We will be targeting the market that is traditionally most receptive to fund managers.' Despite this focus, Invesco will provide MPF services to some smaller companies and entrepreneurs through its network of intermediaries. This sector of the MPF market will be offered a relatively standard product.
Although there would be set-up costs involved, Ms Ngan said the heavier cost impact would come in on-going maintenance. Generic MPF schemes would all need to provide regular balances and provide for investment choices but universal retirement plans overseas had seen demand for a host of other information and trading services.
