Asia growth boon for fund managers

By Mike Taylor

Asia ex-Japan has become the fastest growing asset management region in the world, and given it houses two of the world’s most populous and rapidly growing economies, will remain so for the foreseeable future, according to Boston-based Cerulli Associates.

In a new research report on the region’s asset management market, Cerulli estimates Asian managed fund assets will increase at a 14 per cent compound annual growth rate over the next four years to finish 2008 with just under US$700 billion in funds under management.

The analysis includes both Chinese and Indian asset management firms, as well as those from Thailand, Malaysia, Indonesia and the Philippines. The research found that at the end of 2003, retail assets under management for Asia ex-Japan stood at US$367 billion.

The Boston-based group says while Hong Kong and Singapore have traditionally been regarded as the primary targets for fund managers active in Asia, they will now represent the smallest markets.

“Our forecasts suggest Singapore will be the smallest of the main mutual fund marketplaces by 2008, with less than US$23 billion under management,” Cerulli analyst Shiv Taneja says.

The report suggests banks now account for more than half of all mutual fund distribution across Asia, and by the end of 2008 could account for almost two-thirds of all mutual fund assets.

“Almost every channel is likely to lose market share to the banks, with independent financial advisers still an insignificant distribution channel,” Taneja says.