Who are the best investors, asset managers, and insurers in Asia-Pacific?
National Pension Service, J.P. Morgan Asset Management, and AIA lead awardees who were able to outperform even in the most difficult markets. ESG investment picks up.
In a year when all asset classes performed at their worst level in 10 years, investors, asset managers, and insurers who were able to defend their portfolios against the market onslaught did relatively better than their peers.
Plagued by a flood of challenges including market volatility, the US-China trade war, monetary tightening, and credit risks in emerging economies, global stocks fell by 12% in the fourth quarter of 2018 alone completely erasing the 6.1% gain in the first three quarters, according to the MSCI World Index. Emerging market stocks also suffered badly due in part to a stronger US dollar.
The good news is that interest in environmental, social, and governance (ESG) investing has been picking up despite the poor performance of almost all sectors of the financial and commodity markets. To recognize firms that have embraced ESG factors, The Asset is proud to announce the inaugural winners of the ESG investment awards in this year’s The Asset Triple A Investor, Fund Management and Insurance Awards 2019.
As the importance of the China market continues to increase regionally and globally, The Asset highlights its different subsectors, while recognizing the top firms onshore and offshore.
Given the challenging investment conditions, evaluating the winners was about selecting investors, fund managers, and insurers who were alert and flexible in repositioning their portfolios in a timely manner.
Asset Management Company of the Year
J.P. Morgan Asset Management (JPMAM) was awarded overall winner for “Asset Management Company of the Year, Asia” for managing to defend its business against intense competition under the most challenging market conditions. This is no mean feat considering its huge size in the region. JPMAM managed to generate excess returns for its clients relative to its peers despite the more challenging market conditions in 2018 compared with the year before.
Allianz Global Investors (AllianzGI) was awarded “Asset Management Company of the Year, Highly Commended – Overall” for growing its business in relative terms compared to its peers. A combination of strong performance, innovative new products, and a high level of client service have been the key drivers for its impressive performance.
Barings is awarded “Asset Management Company of the Year, Asia – Fixed Income”. In 2018, its major achievement was making available to retail investors a product that was only previously available to institutional investors thus expanding the universe of products in that space. Its active, credit-focused investment approach is a key component of its strong performance in a difficult market.
Pension Fund Investor of the Year
The National Pension Service (NPS) of South Korea wins “pension fund investor of the year” for 2018 after missing the award for the previous year. NPS demonstrated flexibility through accelerated diversification of its portfolio as well as by upgrading its investment infrastructure. It strengthened its alternative investing capability by reorganizing its alternative investment teams by asset class. This was a major change from its previous organization by regional markets as well as a domestic and global team. Its reorganization by asset class addressed the difficulty of investing in alternative assets that cannot be easily classified by region such as private equity, real estate, and infrastructure. The NPS also strived to streamline the complicated internal decision-making process for alternative investment. NPS was also given the "Editors Triple Star" for ESG stewardship.
Real Estate Investor of the Year – Asia
Singapore-based ARA Asset Management was recognized as “real estate investor of the year – Asia” following a number of ground-breaking deals that showcased its regional capabilities. This included the first close of the ARA Real Estate Partners Asia II (AREP II) with close to US$300 million raised and two seed assets secured by December 2018. AREP II is a value-add, APAC focused strategy targeting the key gateway cities of Singapore, Hong Kong, Sydney, Melbourne, Brisbane, Perth, Beijing and Shanghai. ARA also established its US investment acquiring hotel assets worth US$650 million.
Real Estate Investor of the Year – Hong Kong
The Link REIT continued to focus its investment strategy on Hong Kong and China. In 2018, the Link REIT undertook and completed the acquisition and divestment of a number of projects designed to improve sustainable returns. As of September 2018, Link REIT owns 138 properties with nearly 9 million sq ft of retail space, about 61,000 car park spaces, and a 0.9 million sq ft property under development in Hong Kong, as well as three properties with around 3 million sq ft of retail and office space in China. It also focused on innovative deployment of technology, waste reduction, diversity and inclusion as well as green financing.
ESG Investor of the Year for Insurers – Asia
AIA wins “ESG Investor of the Year for Insurers – Asia” as it made the significant initiative of excluding tobacco manufacturing from its investment portfolio in 2018, divesting US$500 million in corporate equities and bonds. It also became the first Hong Kong headquartered business to become a signatory to the PRI as an asset owner. This allows AIA to benefit from the resources of the PRI as it continues to integrate ESG considerations within its process and demonstrate its commitment to sustainable investment.
ESG Investor of the Year for Insurers – China
The Ping An Insurance Group wins “ESG Investor of the Year for Insurers – China”. Ping An’s ESG initiatives are not part of its investment portfolio but are in the form of social support and poverty alleviation programmes. At the end of 2018, Ping An had implemented the Ping An Rural Communities Support in nine provinces and autonomous regions across China. It invested 5.4 billion renminbi (US$780 million) for poverty alleviation, and built or upgraded over 400 rural clinics, trained 5,702 village doctors, built or upgraded 391 rural schools, and trained 4,819 village teachers.
Ping An also launched the Village Officer Programme which uses Ping An’s capabilities in insurance, financing, capital raising and technology to create a sustainable industrial poverty alleviation model which is also a trial in terms of impact investment.
Insurance Company of the Year – Asia
AIA wins “Insurance Company of the Year – Asia” for achieving a record-breaking growth despite the difficult financial markets. AIA posted 22% growth in its value of new business, the major metric for its performance. In 2018, AIA remains the largest life insurance company in Asia with US$123 billion in market capitalization. In addition to its strong focus on China and major Asian markets, AIA has also expanded into the frontier markets of Cambodia, Myanmar, and Vietnam. It also completed acquisitions in Australia and New Zealand.
Reinsurance Company of the Year – Asia
Asia Capital Reinsurance
Asia Capital Reinsurance (ACR) has continued to seek out investment opportunities that will enable the firm to better achieve its goals while strengthening the three key elements of the portfolio i.e. defensive sleeve, exposure to idiosyncratic return drivers and the use of alpha generative external managers. With higher volatility and stretched valuation in the public markets, ACR has diversified its portfolio by expanding private assets investments in its capital fund to continue diversify our return sources with lower volatilities, potentially act as a structure hedge against inflation.
Fund Manager of the Year awards
Equity – Asia (Winner)
Louisa Lo, deputy head of investments, Asia ex Japan equity and head of Greater China equities, for Schroder Investment Management, wins “Fund manager of the year for equities – Asia”. Lo is lead manager for two China funds, an emerging markets fund, and a Taiwanese fund, which achieved above benchmark returns despite very challenging market conditions. For the China funds, the strong headwinds buffeting the A-share market prompted Lo to take a defensive position which meant rotating some of the allocation to China-Hong Kong consumer related stocks such as Macau gaming stocks and high-end luxury brand stocks. Lo followed a flexible strategy that relied on broad consumer themes, valuation, and stock specific selection.
Mixed Asset – Asia (Winner)
Leon Goldfeld, portfolio manager, Multi-Asset Solutions Hong Kong at J.P. Morgan Asset Management, wins “Fund manager of the year for mixed assets – Asia”. Goldfeld, who won the same award in 2017, manages the J.P. Morgan Multi-income Fund. The fund de-risked its portfolio by reducing its equity exposure early in 2018 and reallocated some of the proceeds to US high yield, a core holding of its multi-asset portfolios. However, the team began reducing the exposure to US high yield in the summer because of concerns about slowdown in growth across the regions. Although the asset class is currently at the lower end of historical allocation ranges, it still offers attractive risk adjusted returns. The bottom-up fundamental research and security selection of its high yield managers should allow the fund to continue to capitalize on opportunities within the asset class.
Equity – Highly Commended
Joanna Kwok, executive director and portfolio manager within the Asia Pacific Dynamic team within the Emerging Markets and Asia Pacific (EMAP) Equities team of J.P. Morgan Asset Management, is recognized as “Fund manager of the year for equities – Asia, Highly Commended”. Kwok’s team manages the J.P. Morgan Asia Growth Fund and other funds with a similar strategy that involves an actively managed, highly concentrated, high conviction portfolio. Despite challenging market conditions, the strategy outperformed its benchmark last year in annualized terms. It has also outperformed its three-year and five-year benchmarks showing that the strategy can outperform in a sharply rising bull market as well as protect against downside performance in a bear market.
Mixed Asset – Highly Commended
Patrick Brenner, head of Multi-Asset Investment, Asia for Schroder Investment Management, is recognized as “Fund manager of the year for Mixed Asset, Asia – Highly Commended”. Brenner is the lead manager for the Schroder Asian Asset Income Fund, the flagship fund which focuses on generating income by tapping opportunities in Asia’s long-term growth. The fund achieved top rankings in Morningstar despite challenging market conditions primarily due to the team’s diversified and unconstrained investment approach that enables them to reduce unwanted sources of risk and avoid some of the hidden risks that single asset classes carry. It also uses a disciplined bottom-up approach to security selection to create a well-diversified portfolio.
Private Equity Fund of Funds (Winner)
Doug Coulter, partner and head of Private Equities Primaries Asia team at LGT Capital Partners, Asia Pacific, wins the “Fund manager of the Year for private equity fund of funds, Asia”, for the eighth year. Coulter’s team expanded its product range over the awards period. LGT CP’s flagship Asian private equity fund, Crown Asia-Pacific Private Equity IV (CAPE IV) had a strong fundraising year despite difficult conditions. Solid returns were posted relative to the competition and public markets even as the firm follows a prudent investment pace and style. LGT was also awarded the "Editors Triple Star" for ESG engagement.
Also recognized as winners in specific asset classes for individual markets are:
The Greater China Equities team led by Caroline Yu Maurer of BNP Paribas Asset Management which won the “Fund Manager of the Year, Equity – Greater China”
- Gordon Ip, chief investment officer of Value Partners, who won “Fund Manager of the Year, Fixed income high yield – Greater China
- Anthony Wong, portfolio manager at Allianz Global Investors, who won the “Fund Manager of the Year, Equity – China
- Eric Tsai, portfolio manager of Capital Investment trust, who won Fund Manager of the Year, Equity – Taiwan
- Esther Teo, head of fixed income of Affin Hwang Asset Management, who won “Fund Manager of the Year, Fixed Income – Malaysia.
Social Media Links (This section can be seen in office only):
Twitter : https://www.theasset.com/article-single.php?id=37234&social=twitter
Linkedin : https://www.theasset.com/article-single.php?id=37234&social=linkedin
Facebook : https://www.theasset.com/article-single.php?id=37234&social=facebook
23 May 2019