Asia Pacific Asset Managers Plan to Offer More Alternative and Multi-strategy Funds, State Street Research Reveals

Monday, August 6, 2018 4:33 am EDT

Dateline:

HONG KONG, SINGAPORE, August 6, 2018
"It’s clear from this data that multi-asset strategies and a wider range of alternative asset classes are seen as important to achieving this."

State Street Corporation (NYSE: STT) today announced the findings from its latest study, the State Street 2018 Fund Strategy Survey, which shows that asset managers in Asia Pacific plan to add more private equity and multi-strategy funds into their product mix in the next five years.  

The study included a global survey of 250 asset managers, 50 of which are based in Asia Pacific, and analyzed how they are developing their distribution and product strategies.

According to the survey, Asia Pacific asset managers are looking to expand their product range to include more complex asset classes over the next five years, with 94 percent planning to offer private equity funds (a 24 percent rise from today), 88 percent planning to offer multi-strategy funds (a 18 percent increase from today), 80 percent planning to offer real estate funds (a 14 percent increase from today) and 70 percent planning to offer loan/debt funds (a 16 percent rise from today).

“Asset Managers are increasingly focused on developing solutions for clients’ more sophisticated needs in the region,” said Mark England, head of Asset Management and Insurance, Sector Sales, Asia Pacific at State Street. “It’s clear from this data that multi-asset strategies and a wider range of alternative asset classes are seen as important to achieving this.” 

The survey also shows that asset managers are planning to expand their distribution platforms, with Asia Pacific managers in particular looking at cutting out the middleman. Sixty percent of respondents in the region (compared to 44 percent of total respondents) said they are keen to increase their proportion of direct, or un-intermediated, sales in the next five years. They also favor cross-border distribution more than their global peers, with 76 percent of Asia Pacific managers expecting to launch more products for cross-border distribution in next five years, compared to 64 percent globally.

“In expanding their product range to include more complex strategies and widening their geographic reach, market participants will have to work more closely with regulators across multiple markets to ensure regulatory compliance as well as deliver on investor needs while at the same time maximizing efficiencies and managing risk,” said England. “Building brand-awareness will continue to be a key component to success in a complex region such as Asia Pacific. It is a challenging environment for the industry but one which also offers an opportunity for a shift in approach which will ultimately benefit investors as well as the industry.”

Asia Pacific asset managers do see significant opportunities in the region. The survey shows that 80 percent of them expect they will have distribution in Southeast Asia in the next five years, followed by 74 percent who expect to have distribution in Japan within the same timeframe, a 22 percent and 24 percent increase from today respectively. While many regional asset managers recognize the huge growth opportunities in China, there are obviously still significant challenges. 60 percent of them think their products will be distributed in that market in the next five years, only 12 percent more than currently.

The majority of Asia Pacific asset managers (90 percent) see distribution-related data as a challenge. “Whether it is alternative investments, local-domiciled or cross-border mutual funds, investment in technology will become increasingly critical to efficiently delivering products to their clients,” concluded England.

To access the full findings, click here to see the State Street 2018 Fund Strategy.

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $33.90 trillion in assets under custody and administration and $2.72 trillion* in assets under management as of June 30, 2018, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s website at www.statestreet.com. 

*This figure is presented as of June 30, 2018 and includes approximately $53 billion of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. 

For Public Use

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for decisions based on such information and it should not be relied on as such.

This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. 

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kate.cheung@statestreet.com

 

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