Asia, Latin America Future Growth Centers for Asset Managers

According to SI, an Asset International company, recent quarterly earnings results from a number of private banks and asset managers highlight growth and net cash flows overwhelmingly from Asia and Latin America/Brazil. UBS reported net cash contributions mostly from “strategic growth areas of the Asia Pacific region and the emerging markets.”  

Julius Baer’s emerging market flows offset low growth in the firm’s European offshore book.  Asia now represents 15% of Baer’s assets, and the stake in Brazil’s GPS is a door into Latin America’s HNW investors. Credit Suisse’s asset management net revenues increased 25%, with strong gains to multi-asset class solutions, and performance fees up due to gains from Hedging-Griffo in Brazil. HSBC recorded double digit revenue growth from Asia and Latin America.   

The report said that with sovereign debt concerns, year-to-date results for locally-domiciled European funds show pronounced fixed income outflows, but many cross-border international funds continue to expand, especially in the bond space – and with contributions from Asia. Additional gains year-to-date come from absolute return strategies, commodities and multi-asset class solutions.   

Asia’s local inflows are more than double those of local Europe.  Unlike in Europe, Asian investors showed little fear over defaults, with $11 billion year-to-date in fixed income flows locally alone.  Top-selling themes include: high yield, Australian dollar, Renminbi and convertible themes.   

SI said $30 billion in year-to-date bond fund flows in Brazil and an overall $1 trillion local industry attract international fund managers strategically, while existing cross-border fund flows to pension funds in Chile, Peru and Colombia offer current and future growth.  Asia themes feature prominently in pension funds for all three markets.