09/07/2010
Western management firms should scale back their ambitions in Asia
Management firms hoping to increase their presence in Asia will need to be aware of the challenges they face, the consulting firm Greenwich Associates says in a recently-published survey (“Global Asset Managers in Asia: Setting Realistic Expectations.”) Firstly, Greenwich Association says, a very low percentage of assets are outsourced to management firms in Asia, compared with the norm in Europe or the United States. As of the end of 2009, assets under management at Asian management firms totalled about USD5trn, compared with USD6trn in the United States. But the similarities end there, since the assets outsourced represent 80% of the total in the United States, and 47% in Europe, but 12% in Asia. Though there is a concentration of assets in key markets such as Hong Kong and Singapore, Asian firms are spread out through a large geographical region with large cultural, financial and regulatory disparities. Finally, many Asian firms are still young, and the largest are still under 10 years old, and are not used to calling in outside providers. Abhi Schroff, a consultant at Greenwich Associates, says there is often an enormous difference between the perception of directors at the helm of management firms, and the reality on the ground. “In Europe or the United States, the Asian market represents a growth opportunity which is often foregrounded in long-term strategy for the organisation. In the Asian office, however, the reality of activities are circumscribed by limited outlooks and daily operational challenges.”
