Australian investment bank Macquarie Group Ltd, a small player in the Asian mutual funds sector, has added funds staff and planned new products in the expectation that Asia's asset management industry will recover sooner than those elsewhere from the global downturn.
Macquarie's funds unit, which specializes in infrastructure, real estate, commodities and resource-related assets, aims to capitalize on the fluidity of investors in Asia.
"We think we've got to build out our business now - taking advantage of things when they move up or stabilize," said Harry Krkalo, who is moving from Singapore to Hong Kong to head the firm's retail sales operation in Asia.
The expansion comes as Macquarie is shedding jobs elsewhere. Sources told Reuters last week that the bank was cutting 10 to 15 percent of its work force in Asia, joining global financial institutions reducing headcount amid the financial crisis.
Of the more than $53 billion managed globally by Macquarie's funds unit at the end of September, just $1.5 billion was in Asia, including Japan but excluding Australia.
Krkalo expressed hope that Asian assets would grow quickly but declined to give a target. Macquarie has hired several executives in Asia and relocated others to the region, bringing its headcount to about 40, out of 750 in the firm's global funds arm.
The markets sell-off has taken its toll on the funds industry. Mutual fund assets in Asia excluding Japan could drop by nearly one-fifth this year before returning to last year's record levels by 2010, research firm Cerulli said in October.
The Asian funds sector surged 86 percent to $1.126 trillion in 2007, before dropping 12 percent in the first half of 2008, according to Boston-based Cerulli.
Krkalo predicted that when markets improve, the region's investors will scramble to find opportunities.
"Asian investors are really quick to move," Krkalo said in a telephone interview.
Asia's fund industry is dominated by heavyweights such as ING, Schroders Plc, JPMorgan's JF Asset Management and Prudential Plc, as well as Nomura Holdings and Citigroup's Nikko Asset Management unit in Japan.
"So when things get pessimistic, everyone becomes pessimistic. But when there's an opportunity and people think they're going to miss out on something and things turn, Asian investors move really quickly compared with those globally," he said.
Among its planned new funds is a product based on the Macquarie and Rogers China Agriculture Index. The index, developed by the bank and high-profile commodities investor and China bull Jim Rogers, tracks changes in the consumption of agricultural products in China.
"The novelty factor is the fact that we're linking it to Chinese consumption," said Krkalo.
(HK Edition 12/02/2008 page3)