Saturday, May 1, 2010

Russell pressing ahead with Asia growth plans

PROPOSED regulatory changes on Wall Street could result in 'some changes' for global financial services firm Russell Investments.

However, the full implications are not yet clear, the firm's president and chief executive Andrew Doman said yesterday.

United States-based Russell is pressing ahead with expansion in Asia and other regions.

'Regulatory change in the US is not clear. There could be some changes for us, but we are not aware of what they will be at this point, so we will watch closely and will be maintaining a very close brief on the regulatory change in the US and in Europe,' said Mr Doman.

The impetus for expanding in Asia lies in the opportunities the region presents, rather than the threat of greater regulation in the West, said Mr Mahendran Nathan, Russell Investments' chief executive of Asean, India, Hong Kong and Taiwan.

'Our business is growing globally, in Asia it's primarily a growth story,' he said. 'We are actively trying to find new people and more resources because the demand for our products is overwhelming.'

The former chief executive and managing partner of Wealth Management Asia joined Russell last November, after the latter divided its business in the region into three sub-regions to focus on each market.

The first is southern Asia; the second, Japan, China and Korea; and the third, Australia and New Zealand.

Earlier this month, the firm also announced the appointment of three senior executives in South Korea, Taiwan and Singapore to cater to the growing Asian market.

And it is trying to get a piece of the pie as a multi-manager fund. This means that it invests its clients' assets in a variety of other funds it hand-picks, and allocates assets according to the needs of its clients.

'If you appoint a fund manager directly, that manager may not perform, or that managing style may change or may not be applicable in a certain market cycle anymore,' said Mr Nathan.

'In the multi-manager process, we find optimal manager mixes...A lot of time is spent doing asset management research and consultancy.'

Plans are afoot to launch exchange-traded funds (ETFs) - funds that trade on a stock exchange like a stock and expose investors to a basket of securities - throughout Asia, after it has done so in Australia next Monday.

'We think ETFs will steadily replace mutual funds as a preferred vehicle for investment. We want to be a part of that, and we want to give clients active alternatives,' said Mr Doman.

Looking ahead, the firm sees significant opportunities for its clients' funds in exposure to global emerging and Asian markets, as well as in distressed assets - all of which there have been increased demand for, he added.

'There are a lot of distressed property and private assets around that can be packaged for clients...There is an overhang in property in markets like Dubai and London, and the US is another interesting area for distressed property,' he said.

'It will recover in time, but right now those assets are being sold at a fraction of their true value.'

Source: Straits Times, 1 May 2010

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