The years of easy growth for Asian asset managers, at least relative to their counterparts in other parts of the world, have come to an end. Now executives are looking closely at China to see if the country can maintain growth, stabilize its markets and project stability around the region.
“It was our most difficult year since 2008,” says Cheah Cheng Hye, founder and co-CIO of Value Partners, a Hong Kong–based long-short hedge fund firm with $13.6 billion in assets. “The environment in our main market, which is China-related equities, has been very difficult.” So difficult, in fact, that the firm reported a 96 percent drop in net income in the first half of 2016, to 3.3 million Hong Kong dollars ($430,000).
Weak markets and worries about growth are putting pressure on fund managers across Asia. Chinese stocks barely began recovering from the summer 2015 meltdown before taking another hit earlier this year, while investors in Japan turned bearish on Prime Minister Shinzo Abe’s economic policies as growth slowed.
“We have a fragile global economy and demographic shifts around the world that influence how people are thinking about savings and investments,” says Kevin Anderson, head of investments for the Asia-Pacific region at State Street Global Advisors in Hong Kong. The firm managed to grow its assets modestly in Australia and across Asia in the 12 months ended March 31.
Institutional Investor’s 23rd annual ranking of Asia’s biggest institutional investors was compiled from a variety of sources, including questionnaires filled out by the institutions themselves, company web sites and annual reports, and regulatory agencies. II researchers refined this data through follow-up e-mails and telephone calls. When official data were unavailable, we obtained figures from actuaries, brokerages and consulting firms. Estimates are footnoted where used.
Senior Research Editor Jane B. Kenney led the project, with assistance from Researchers Serina To (in Hong Kong) and Atsuko Ogino (in Tokyo).