How has the acquisition of Friends Provident International affected Aviva Investors in your territory?
Friends Provident (FPI) has its head office in the Isle of Man now, but it is focusing on four areas – Dubai, Japan, Hong Kong and Singapore – so it is very much in our remit at Aviva Investors, Asia Pacific.
And what of Friends Life?
Globally, Aviva Investors is quite big. We had about $450bn assets under management as of 31 March 2016. In Asia, we only have about $5bn in fixed income and about $1bn in global indirect property. Most of the fixed-income money that I manage is [from] Aviva Singapore, or to a smaller extent Aviva Life, which is in Hong Kong.
The Friends Life deal was very much about adding value and a great opportunity for Aviva Life in the UK.
For Asia Pacific, FPI gives us another distribution platform and channel to work with. I have worked in the investment arm of insurance companies all my life and it is great to have a strong partner that gives you critical mass. In April 2011, we started managing money in-house for Aviva. Then we were able to use Aviva’s distribution base to grow critical mass, and now we have another opportunity with FPI.
The good thing about FPI, as compared with Aviva Asia, is that it has a customer base of expats. It is building a part of the business that Aviva Investors most likely didn’t reach before. While Aviva is well known, especially in Singapore, Aviva Investors has not been. We are starting to promote both brands and get our funds registered for retail.
Life firms seem to be putting a lot of resources into expanding in core regions. Is this a trend?
Everybody wants to be in the growth markets, don’t they? The good thing about it for Aviva Investors is that in the past we have principally been institutional wholesale fund managers. So, the fact that others are expanding, suits our distribution model. We are very reliant on other people’s platforms in the retail market, whether it be Aviva’s Navigator, FPI or an external platform, such as iFAST.
Going forward, as we bring global products to the region and start to distribute them in the retail space, dealing with other platforms and distribution channels will become more important. A big part of my role is to externalise the business and that is where these other distribution channels fit.
Tell me more about your dual role?
I joined Aviva Investors as chief investment officer of fixed income in Singapore in December 2010. Then, about two years ago, I also became chief executive officer.
Most of my team have been with me for about five years. Jethro Goodchild, who is my second in charge and head of fixed income, used to work with me in Australia, so we have been together for a while and that has been quite successful.
I am definitely not doing it on my own. I have got a good team and I do not get involved in the day-to-day trading.
How did you start your career?
I started in the sector in 1983 at National Mutual Funds Management. In May 1998, I joined AMP Capital, the investment arm of AMP, where I ran fixed income and currency. In June 2006, I took over as investments director for Asia for AMP in Sydney and set up the Asian investment team.
I moved to Singapore with AMP Capital in June 2007. I wanted to be part of building a business in a region that was booming. It has been a great move.
After moving to ANZ Banking Group for about 15 months, in 2010 my current role came up and I jumped at it.
Does strategy differ by market?
Our investment professionals and fund managers are in Singapore. The teams in Australia and Taiwan are purely for distribution.
Singapore is focused on managing Aviva money for Hong Kong and Singapore. Where strategies for Aviva can be externalised, for example where they are not purely insurance type funds or with an insurance-type focus, they will be.
Looking ahead, the main strategy for us will be the US dollar Asian investment grade fund. We manage quite a lot of Asian US dollar credit and I expect there will be funds flowing in from the Aviva Investors and the Aviva Group worldwide, but first we have to set it up as a public fund. Hopefully, that will be by the end of 2016.
We have been managing it as segregated mandates, but we are now in a position to externalise that. We think the US dollar Asian investment grade fund is definitely a product we will be able to grow to a critical mass and will be scalable globally.
The rest of the build-out in Singapore is to distribute the global products that Aviva Investors manages, principally from London and Chicago. That means global high-yield and, as we move forward, global high-yield emerging market debt, which is both sovereign and hard currency.
We also manage a global investment grade credit fund, and we run the Asian component of that fund in Singapore.
We are looking to distribute all of those funds and the Aviva Investors Multi Strategy (Aims) capabilities, both the target return and target income.