Nearly half of Asian fund managers seek new markets, State Street survey shows
More than two fifths of fund managers in Asia say branching out across borders is their top priority, according to a survey by State Street Global Services.
Forty-two percent of all fund managers surveyed in Asia say they are currently considering expanding into new markets and countries, while 28 percent say it is their number one objective for the year, notes the survey of fund managers in Singapore, Australia, Hong Kong, Japan and elsewhere.
International expansion plans are most prominent among fund managers based in Japan, where 52 percent say it is a top priority, according to State Street. Expansion is a top priority for 28 percent of fund managers in Hong Kong, 23 percent in China and 23 percent in Australia.
The rapidly growing market in China is one reason for fund managers’ expansion plans in that country, but lower returns in the funds’ home markets and limited market size are also driving managers to seek profits elsewhere, says Paul Khoury, head of asset manager sector solutions in Asia-Pacific for State Street.
‘Many companies in the survey that wish to operate in China are already doing so,’ Khoury says in a press release. ‘Now asset managers are also looking to frontier markets, with 54 percent of those preparing to enter a new market considering Malaysia, and 43 percent considering expansion in Thailand. Companies that are targeting new markets are driven by both opportunity and economic necessity. Staying put is often not an option.’
Fragmented geography, culture, language, regulation and tax structures, however, pose major problems to international expansion in Asia, according to 51 percent of the survey’s respondents. When including only companies that work in more than one country, that fragmentation is a major issue cited by 63 percent.
