Magazine issues » July 2019

Survey: Surfing the technology tsunami

Calastone_event_Asia_2019Funds Global Asia and Calastone partnered in Hong Kong and Singapore to share insights on the impact of changing technologies on Asia’s funds industry, adapting to stay relevant and the changing make-up of investors. As the funds industry weathers fundamental changes, Funds Global Asia and financial technology firm Calastone teamed up for a third year to produce a survey considering the dominant trends in Asia’s asset management industry. At the Hong Kong Jockey Club Hall at the Asia Society, Leo Chen, managing director and head of Asia at Calastone, started the day off with a business update on the past 12 months, including the addition of 800 new firms to its global fund transaction network. These links include retail banks, platforms, insurers, custodial banks, robo-advisories, transfer agencies and fund managers in Hong Kong, Taiwan, Singapore, China and, most recently, Malaysia. Next, Marie-Anne Kong, a partner and Hong Kong asset and wealth management leader at PwC, looked at how asset and wealth managers should respond to key trends transforming the asset management industry’s structure. Funds Global Asia’s research editor, Bob Currie, presented the findings from a survey undertaken in association with Calastone. He analysed which emerging technologies will impact Asia’s funds industry the most and where respondents expect this to be developed. He also looked at which type of companies will be valuable partners to asset managers in driving business innovation and which will be disruptors. This presentation also considered the most important fund distribution channels in Asia and those that will dominate in the future. The research found that Hong Kong is the most favoured destination for investment flow from Asian investors (highlighted by 50% of respondents), with mainland China second (at 48%). These were followed by the US (39%), Singapore (35%), other Asian markets (33%) and Europe ex-UK (19%). Since most respondents were in Asia, we should factor in a degree of home bias. India is also on the rise, with 33% of respondents believing the world’s largest democracy offers asset managers the most opportunities to grow their business. Indonesia and Thailand trailed India with 19% apiece. The full findings of the survey are available in ‘The Impact of Technology on Investment Funds’ report. Staying relevant
The need to adapt to new technologies to remain competitive is a central theme and Calastone’s client relationship director, Becky Chiu, hosted the day’s first panel alongside industry experts. In Hong Kong, Caroline Higgins, senior vice president and head of fund services – Asia at Northern Trust, Betty Zhou, head of business development at Caceis, Dean Chisholm, chief operating officer at Invesco Asia and Rakesh Vengayil, deputy chief executive officer – Asia-Pacific at BNP Paribas Asset Management, discussed how best to use this new tech. Experts in Singapore included Justin Ong, partner and Asia-Pacific asset and wealth management leader, PwC Singapore, Hong Paterson, Singapore country head and managing director at RBC Investor & Treasury Services, Freddy Lim, chief investment officer and co-founder at StashAway and Mathew Kathayanat, head of product and strategy for Asia-Pacific – asset servicing, BNY Mellon. While 66% of survey respondents say asset managers have improved their ability to manage technology adoption over the past three years, there is still some way to go. The panellists also discussed the findings and shared their insights on how the industry is dealing with new technologies to stay ahead of the curve in an evolving world. Millennials
Born between 1981 and 1996, millennials are an increasingly important target for asset managers – but are comparatively worse off financially than those before them after starting their working lives during or after the global financial crisis. Calastone surveyed more than 3,000 people between the ages of 23 and 35 to gauge their attitudes towards personal saving, investment management and financial services. The countries included the UK, France, Germany, the US, Hong Kong and Australia. Presenting the findings, Andrew Tomlinson, chief marketing officer at Calastone said: “One consistent factor over the last century has been that every new generation has been wealthier than the one that preceded it – until now.” However, this same generation is also set to inherit what is perhaps the largest transition of wealth. The question is: when? The survey – ‘Millennials and investing: a detailed look at approaches and attitudes across the globe’ – looks at what the age group prioritises, their understanding of investing, concerns about financial security, awareness around saving and their attitudes towards environmental and social governance. Its results may come as a surprise to many. Developing China’s tech
Of course, no conversation on investing in Asia would be complete without a look at China, a country locked in a protracted trade war with the US while seeking to attract greater foreign participation in its financial sector. Technology is very much the focal point of the dispute and Jun Li, chief investment officer at Sagard China, travelled from Shanghai to share her views. The firm has been investing in Asia for more than a decade, primarily in equities, and is optimistic about China’s future technology developments and investment opportunities due to strong drivers. Li highlighted R&D spending as a percentage of GDP (now about 2.1%), adding: “China will continue to invest into the development of technology and this will continue to drive future growth.” Another aspect fuelling confidence behind China’s economic and technology growth is venture capital (VC) putting a huge amount of money into the sector. VC investments have been steadily rising in China over the past decade and when it comes to VC funding on a global basis, “for the first time in the second quarter of 2018, the money invested in China reached about $30 billion – the first quarter that exceeded the money invested in the US,” said Li. “That is very significant because it means that investors are putting more effort into the development of technology in China.” ©2019 funds global asia

Industry comments

Investing in tomorrow’s world

investmentAt times like these, HSBC Asset Management easily pivots towards emerging markets.

The spotlight on growth markets and the need to be nimble and dynamic is ever-sharper, given the difficulty in predicting monetary policy in the world’s major nations.

Sponsored feature: Navigating the complexities of FX execution and currency risk

A comprehensive, cost-effective, and transparent currency overlay hedging solution is crucial to mitigate FX exposure risks in the complex landscapes of Japan and China's FX markets, explains Hans Jacob Feder, PhD, global head of FX services at MUFG Investor Services.

Opinion

Transitioning to an era of scarcity

The world is transitioning from an era of commodity abundance to one of undersupply. Ben Ross and Tyler Rosenlicht of Cohen & Steers believe this shift may result in significant returns for commodities and resource producers over the next decade.

Asia credit: An outsized winner in the region’s energy transition?

Ross Dilkes, fixed income portfolio manager at Wellington Management, examines the opportunities and risks for bond investors presented by the region’s decarbonisation agenda.

A quiet revolution in Japan’s corporate governance

revolution, Japan, corporate governance, Shareholders, corporate, governance, standards, improvement, Tetsuro Takase, SuMi TrustShareholders in Japan no longer accept below-par corporate governance standards. Changes are taking place, but there are still areas for improvement, says Tetsuro Takase at SuMi Trust.

Why rising demand for healthcare is creating investment opportunities in China

rising demand, healthcare, investment, opportunities, China, Robert St Clair, Investment Strategy, Fullerton Fund ManagementRobert St Clair, head of investment strategy at Fullerton Fund Management, explores the reasons investors should be paying attention to the rising demand for healthcare in China.

Executive Interviews

Executive interview: PGIM CEO on where the ESG flowers should bloom

Sep 27, 2021

David Hunt, president and chief executive of PGIM, tells Romil Patel about leading a top 10 global asset manager in times where “empowering and encouraging the kind of investment decisions as...

Executive interview: Nicolas Moreau’s orderly transition

Jul 12, 2021

Nicolas Moreau, CEO of HSBC Asset Management, is moving to Asia as the firm looks to connect more directly with the region’s growth story. ESG is also a key focus – including the ‘just’ carbon...

Roundtables

India: An “obvious choice for global investors”

Jun 22, 2023

Funds Europe, the sister publication of Funds Global Asia, hosted an India investment discussion with two seasoned experts and asked if India is the ‘last one standing’ from the Brics phenomenon. We also hear that for India, the inclusion of Indian bonds in a major index may not be the desired...

Roundtable: Singapore comes of age as an Asian ESG hub

Dec 01, 2021

Strong ESG credentials strengthen the case for Singapore as a leader in Asia of the post-Covid recovery. Our panel discusses the risks and opportunities.