In Taiwan, it is mostly about global high-yield at the moment. This is because the regulator does not allow you to have a fund that is greater than 40% derivatives and the Aims funds have more than that.
We cannot get a retail licence in Taiwan for Aims, but as it grows we can distribute it via an offshore banking and insurance unit, to institutional-type clients.
We have had a presence in Taiwan for eight years, headed by Lian Yang. There are some substantial flows that come out of Taiwan. About 60% of the investors there invest in global high-yield funds. That is quite a substantial number. While we have got about $500m in total in Taiwan, we think we can grow that substantially because of the track record of our global high-yield fund.
Our master agent is China Trust Bank, which looks after the retail side for us. We also have a joint venture between Aviva Insurance and Taiwan-based First Financial Holding – First-Aviva Life Insurance – which covers our distribution on the institutional side.
The country head of our Taiwan office, Lian Yang, will also help us develop our China distribution capability, which is not big in terms of flows but has huge potential in terms of equities, especially on the credit side.
Aviva also has a joint venture with the China National Cereals, Oils and Foodstuffs Corporation and is seeking to build that business. We have to decide in the future whether to go with Cofco or set up our own, but we have higher priorities at the moment.
Is Australia one of your priorities?
Australia is going very well. We have a team there focusing on the institutional and wholesale market and, going forward, we will focus on the retail market, covering Australia and New Zealand.
Australia is a distribution base, so we are looking to distribute some of the global indirect property capability that we have. Currently, we are having most success with our Aims total return fund. It is an Australian feeder fund of the Aims fund, which has an objective of cash plus 5%.
Aviva was in Australia for quite a while as an insurance company but that business was sold at the end of 2010 to National Australia Bank. We also used to have an Australian fixed income and equity funds management business but that was sold.
What is the growth strategy for Aviva Investors in Asia Pacific?
Our multi-strategy funds are going well in Singapore. We were registered for the institutional and wholesale market in November 2015 and in February we got approval from the Monetary Authority of Singapore to sell to the retail market.
Elsewhere, we are hoping to distribute into Japan and are looking at a couple of potential strategic distribution tie-ups.
We have also got a strategic distribution relationship with Vertus in the US for the Aims portfolios, and we have a partner in Canada as well.
Even further down the track, we are keen to increase our presence in Korea, too.
We do not have a distribution capability in Hong Kong, so we will be working closely with Aviva and FPI in Hong Kong. There is quite a bit of change at FPI as it is now focusing on Asia and the Middle East, but as soon as FPI is ready, so are we.
Hong Kong’s Securities & Futures Commission would not allow us to register Aims as a retail fund, so we will only be offering that to independent financial advisers, high net-worths, professional investors and institutional businesses.
There has been a lot of focus on mutual recognition funds in Hong Kong during the past few years, but either you have to be a fund manager on the ground there, which we are not, or you have to have funds that have been licensed in the region.
We want to be known as a leader in outcome-orientated solutions globally, and that includes our Aims funds – which we could not register for retail in Hong Kong – so, we have more work to do.
