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HSBC AM CEO sets out big plans for Asian expansion

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Even against the backdrop of high inflation, increasing interest rates and turbulent markets, Asia has continued to deliver sustained growth for HSBC Asset Management, according to Nicolas Moreau, who has big plans to develop the business in the region further.

The industry stalwart, who joined the asset arm as CEO in September 2019, moved from London to Hong Kong this year to run the business from Asia, where about 40% of HSBC AM’s staff work. Half are based in Europe, with the rest in the US.

“As at 30 September 2022, Asia maintained a steady contribution of around 30% to our global AUM,” Moreau told Asian Private Banker in an exclusive interview. “We are managing roughly US$600 billion of assets globally. The remaining 60% of the AUM is in Europe, and 10% is in the US.”

Moreau was previously global CEO of Deutsche Asset Management, where he was instrumental in its listing on the Frankfurt Stock Exchange in March 2018 and its rebranding as DWS.

Before that, he spent 25 years with AXA Group, holding various leadership positions including CEO of AXA Investment Managers, CEO of AXA UK and Ireland, and chairman and CEO of AXA France.

Better and diverse

The CEO hopes to translate his ambition for the business to its employees. “I like to have people around me that share the same ambition,” he explained. “I’m not the type who manages stuff on an ongoing basis. I delegate a lot and take great care about having the right people in the right job.”

Like the age-old management tip, he tries to hire people who are more capable than him and watch them excel in different areas of the business. He also believes in diversity and inclusion in the workplace: half of the 18 entities that make up HSBC AM around the world have a female CEO in charge.

Photo by Aaron Blanco Tejedor on Unsplash

Daisy Ho, who joined the business from Fidelity in November 2021, is HSBC AM’s Asia Pacific CEO and women lead the fund management operations in Taiwan, France, Switzerland, Bermuda, Malta, and Turkey, as well as HSBC Alternatives and Hang Seng Investment Management.

“Our Asia CIO, head of Chinese equity, and head of our circular economy fund, are also women,” Moreau pointed out. “I would say we have more women portfolio managers in Asia compared to Europe.”

Asia growth plans

The group has its biggest asset management presence in Asia in Hong Kong, with smaller units in Singapore, Japan, Australia, and Taiwan, and recently expanded in South Asia, having received the approval of the Securities and Exchange Board of India to fully acquire L&T Investment Management (LTIM), which manages US$8.79 billion.

After it completes the acquisition, HSBC will merge LTIM with its existing asset management business in the country, which had AUM of US$1.66 billion as of September 2022.

“We have big ambitions in India,” Moreau said. “We are just closing the acquisition and that will put us among the top 10 players in the country, as well as give us scale to develop the corporate market much more.”

“We inherited a huge retail platform with 55,000 distributors and is present in all the asset classes. We are launching an Indian equities ETF because there’s demand. And we will look at other inorganic opportunities in India because that’s one of the markets where we want to be among top five,” he added.

Moreau is keen to develop an asset management platform in places where HSBC already has a banking presence, such as Malaysia, Indonesia, the Philippines, and Vietnam, and is looking at opportunities to team up with local partners.

“In Singapore, we used to have only a distribution office, but now we are managing money in Singapore, so we are moving portfolio managers and recruiting portfolio managers,” he added.

“We are also developing alternative asset management in Singapore. Soon we will have a full-fledged office and service [more] private banks because we see inflows coming,” he said.

Photo by Felix Mittermeier on Unsplash

Finding a niche

What sets HSBC apart from its peers, Moreau feels, is its global proposition because “some of the competitors are Asia-focused. In other words, they can’t provide global products to local investors, and that’s something we can do a lot – be it a US product or thematic fund.”

Investors in Hong Kong and Singapore, he said, are looking for income growth probably much more than in those in Europe or the US. The bank is also seeing an increased appetite for short-duration bond strategies, and as such, is looking to launch fixed maturity products.

Demand for alternatives has also gained traction this year, but Moreau prefers to focus on areas where the firm can make a difference. “We would not do buyouts in Asia, Europe, or the US because it’s too late and there are already too many strong players. We would rather do only real estate in Asia and sustainability is a big focus for us.”

One example he quoted is Climate Asset Management, which was formed by HSBC AM and specialist climate change investment firm Pollination in August 2020, to offer investors exposure to global natural capital themes in both emerging and developed markets.

“The joint venture is investing in nature, and we are looking at green infrastructure because we believe we can make a difference in green infrastructure in Asia. We try to find spots where we can make a difference and can be credible. We need to be realistic about who we are, where we are, and what are our options in the market,” he said.

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