JF Asset Management and its strategic MPF partner, AIA Pension and Trustee Co, are among the top few MPF providers with about 15 per cent of the market, according to Gerry Ng Joo-yeow, head of institutional sales and client services at JF Asset Management.
Mr Ng's estimate is based on AIA-JF's share of the predicted 2.1 million members contributing to the MPF. There are 20 authorised MPF providers, but Mr Ng says he expected some consolidation in the industry.
'When you consider the top five providers have about 60 to 70 per cent of the market, there is very little left over for the smaller players. I would say there must be some consolidation, although we have not seen much of it yet. We will probably see more movement in the next year or two depending on markets.'
With equity markets depressed, the income to fund managers and providers is far lower than it would be if portfolios were fattened by equity gains - much of their income is earned as a percentage of assets under management which would swell if stock markets entered another bull phase. Under the alliance with AIA, JF acts as joint investment manager. Both AIA and JF funds are included in the investment choices offered to MPF members. An investment committee with representatives of both companies meets regularly to decide on asset allocation.
'It is a joint investment committee style where we lend our names to products. We are exclusively aligned with AIA in MPF,' Mr Ng says.
AIA Pension and Trustee managing director Desmond Chan Kwok-kit says the joint venture with JF had succeeded beyond all expectations and confounded its earlier critics.