(This piece first appeared in Opalesque in February 2013)
Hong Kong based Joost Lobler is head of sales for Asia, ex-Japan for the Global Asset Services division of SuMI TRUST, the company that was previously known as Sumitomo Mitsui Trust Group. The original company had been through some significant changes in recent years, with Opalesque reporting on its sale by Daiwa which was completed in November 2012.
In an interview with Asia Pacific Intelligence, Lobler explained that† SuMi TRUST has big plans for the fund services† division. "A company like SuMi TRUST didn't buy us just to hold us, they bought us with a purpose" he says. SumiTRUST is the largest trust bank in Japan, managing $700bn in assets, the majority of which are drawn from Japanese institutions. The firm is the only Japanese bank that owns a global fund administrator, administering onshore funds and now diversifying into offshore fund administration, thereby creating synergies within the Group.
"They already work with hedge funds in a different capacity, advising institutions on investing into hedge funds" Lobler explains. "There is a lot of knowledge about hedge funds within the group." SuMi TRUST also owns Nikko Asset Management, which is partly a retail manager but also has alternative investment funds and managed accounts. SuMi TRUST is also† one of the larger shareholders of the Man Group's fund of hedge fund business, FRM Asset Management. They also have 40%† of NewSmith LLP,† which is a multibillion asset manager offering both traditional and alternative strategies.
Post purchase by SuMi TRUST, the management team of Global Asset Services started drafting a three year road map with the aim of aggressively growing the assets in the offshore fund administration business. "We are† aiming to at least double our assets under administration and custody in the next three years" Lobler says.
He reports that in Hong Kong and Singapore, the general atmosphere is upbeat. "There are still launches every month but the number of launches has gone down as it is more difficult to find investors. On the other hand the market volatility and the upside of the markets in Asia is a lot better than other areas in the world so there is a lot of potential interest from other regions where returns are not high enough."
Lobler believes that the regulatory environment in Asia is kinder to hedge funds than it is in Europe or the US. "Regulators here are not yet as strict as in Europe or the US" he says. "Regulators in Singapore and Hong Kong are in a way more professional because they understand this business cannot be restricted too much. And controls are effective - in terms of fraud, 95% of them come from the US market, you hardly see it coming out of Asia."
Expansion will happen across the Asia Pacific region for SuMITrust, with new teams and additional staff in Hong Kong and Japan. The plan is to expand the Hong Kong office will† to a full operational hub for the Asian time zone. By adding operations to the US office of SuMi TRUST and combining this with the operations in Dublin and London, they effectively will create a global service platform.
"We are setting up a global operations platform, whereby Hong Kong will be the 'hub' in Asia. In Hong Kong we have started hiring client support and relationship management staff again, to service our clients in their own time zone. In the coming six to 12 months we intend to hire more sales staff in Europe, the US, Hong Kong and possibly Singapore. We will add fund accounting staff as well and we target being a full operations office in Hong Kong before the year end. Therefore we expect the office to grow substantially in 2013" Lobler says.
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.