Asia's Top Money Managers
Kim Teo made a name for himself in Singapore in the late 1990s by launching more than 20 new retail funds -- including everything from Internet to country selections. By 2000 First State Investments, his once-obscure local investment firm, had tripled its assets, to nearly $1 billion, and become the largest privately held retail fund house in all of Southeast Asia. After selling itself to Commonwealth Bank of Australia early that year, First State stumbled badly once the technology bubble burst. The 46-year-old Teo, who today heads AIB Govett (Asia), with more than $700 million in funds, misses the go-go era.
"The days when you could manufacture a new flavor-of-the-month fund and keep attracting the crowds in Asia may be over," he says ruefully. "Unfortunately, these days just one thing sells in the region: safety."
Like their counterparts around the globe, Asian investors -- both institutional and retail -- want to make sure their capital is preserved. It's an understandable urge. The Asian financial crisis, Japan's slow-motion decadelong decline and the flameouts of global tech, telecommunications and biotechnology stocks, not to mention weak overseas markets and the end of soaring Asian property prices, have all taken a toll. "Return of capital, rather than return on capital," has become all-important in the past year or so, says Bruce Pflaum, who heads U.S. consulting firm Frank Russell Co.'s Asian office in Singapore.
To the keen disappointment of spirited equity entrepreneurs like Teo, the most popular investment products of the past year have been the most stable ones. One example of Asian investors' new conservatism: The Hong Kong Investment Funds Association estimates that 84 percent of net retail flows in the first five months of this year went into so-called guaranteed or capital-protected funds, which invest most of their money in paper like zero-coupon bonds that will return all principal in two to five years. They put the rest into riskier assets, such as equities indexes or options strategies. An additional 5 percent of Hong Kong's retail money was earmarked for bond funds, leaving just 11 percent for equity investments. That's a marked departure from two years ago, when more than 85 percent of new money went into equities.
The move into fixed-income-based products isn't just a retail phenomenon. As is evident in Institutional Investor's 2002 Asia 100 ranking of the largest money managers in the region, bonds were the one bright spot in an otherwise challenging investment environment.
How the rankings were compiled Institutional Investor's eighth annual ranking of Asia's largest institutional investors includes banks, insurance companies, pension funds, independent fund managers and firms domiciled in 11 Asian countries, as well as 20 international managers with significant investments in the region, though the assets are not necessarily managed there. Subsidiaries with substantial assets under management have generally been listed separately.
The rankings were compiled from a variety of sources, including questionnaires filled out by the institutions themselves. In many cases, II refined this data through follow-up faxes, e-mails and telephone calls. In some cases, researchers culled information from annual reports or tried to get data from finance ministries and regulators. When no official data was available, II obtained figures from actuaries, brokerage firms, consultants and company Web sites. Estimates, marked with a footnote, account for the remaining numbers. When possible, figures are broken into regional and asset categories.
II staffers sought to make the numbers as comparable as possible, given the different levels of disclosure and varying accounting practices in use across Asia. In most instances, the "miscellaneous" column includes loans. Inevitably, there is double counting of assets in some countries because of the lack of disclosure standards and the variety of sources needed to reach an approximate total figure for some money managers.
Because of currency conversion and rounding, breakdown figures may not add up to the sum of total assets.