Wellington Management plans Asia expansion targeting growing wealth in China and wider region

08-Apr-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

Wellington Management plans to increase its headcount by about 20 per cent in Asia this year as it seeks to capitalise on rising affluence in the region, particularly in China, according to the head of its Asia-Pacific business.

Asia is the independent investment manager’s fastest growing market globally and where the company is putting “more and more of our resources”, according to Scott Geary, partner and head of Wellington’s Asia-Pacific client group.

“We’re very bullish on China,” Geary said. “Whether it’s the huge wealth effect or the demographics driving the need for more retirement solutions, we certainly think from an alpha perspective: it is a market that has a high amount of dispersion.”

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China has been a more retail driven market, but is becoming more institutionally driven, which plays into Wellington’s strength serving institutional investors, Geary said.

Increasing inclusion of Chinese stocks and bonds in global benchmarks also makes China an attractive market, particularly for Wellington’s global clients, he said.

Wellington, based in Boston, is a privately held investment management firm with more than $1 trillion in assets under management. It primarily advises institutional investors, with more than 2,300 clients in over 60 countries.

The company, which opened its first office in Asia in 1996, employs more than 300 people in the region and manages about $140 billion for clients in Asia.

Wellington’s business in China is focused around three pillars: outbound flow of capital from China to global financial markets, inbound flow from international investors, and its burgeoning onshore business, Geary said.

It received a wholly foreign-owned enterprise (WOFE) licence for investment management in China in 2019 and opened an office in Shanghai last year.

Wellington hopes to launch a qualified domestic limited partnership (QDLP) product later this year, which allows international funds to raise money directly from Chinese investors, Geary said.

“Obviously, there’s been increasing liberalisation of the China capital markets,” Geary said. “It is creating more favourable conditions for global asset managers.”

The planned expansion by Wellington in Asia comes as other foreign financial firms are betting on rising affluence and further opening up of China’s financial markets despite concerns over strained Sino-US relations.

Citigroup said last week that it plans to add 1,700 people across its business in Hong Kong in a big bet on future capital flows into and out of China.

HSBC, the biggest of Hong Kong’s three currency-issuing banks, said in February that it plans to hire more than 5,000 people in its wealth management business and invest $6 billion in total in Asia over the next five years as part of a broader pivot to the region.

Credit Suisse plans to triple its headcount in mainland China over the next three years as it moves to take full control of its mainland securities joint venture.

Wellington also remains “fully committed” to Hong Kong despite recent geopolitical concerns, Geary said.

The company plans to expand into retail fund distribution in the city, with a partner, later this year, Geary said. It employs more than 100 people in the city and continues to expand after opening its office here in 2003.

“For us, Hong Kong is really integral to our Asia strategy,” Geary said. “We have no plans to leave or exit the market. We have established a number of deep, long-standing relationships with Hong Kong clients. Our commitment to those clients and Hong Kong remains strong.”

The new Wealth Connect programme and the ability for foreign investment managers to distribute products to more than 70 million people in the Greater Bay Area is one reason Hong Kong remains attractive.

“We think it’s a really exciting opportunity for the financial services sector,” Geary said.

He said there are a lot of firms looking to hire in Asia right now, but he feels Wellington has several advantages: its stability, diversified business and the ability for recruits to own a piece of a $1 trillion investment manager.

“We’re not the only firm to lean into Asia. A lot of firms see that the growth is here,” Geary said. “There’s a lot of war for that talent, but I think we’ve done a really good job with attracting the talent we have.”

https://sg.news.yahoo.com/wellington-management-plans-asia-expansion-092202769.html

 

Category: China

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