Asia Pacific (APAC) asset managers are looking to expand their product range to include more complex asset classes over the next five years, according to State Street Corporation.
State Street released the findings from its latest study, the State Street 2018 Fund Strategy Survey, which shows that asset managers in Asia Pacific plan to add more private equity and multi-strategy funds into their product mix in the next five years.
The study included a global survey of 250 asset managers, 50 of which are based in Asia Pacific, and analysed how they are developing their distribution and product strategies.
According to the survey, some 94 percent of asset managers are planning to offer private equity funds (a 24 percent rise from today) and 88 percent are planning to offer multi-strategy funds (a 18 percent increase from today).
A further 80 percent are planning to offer real estate funds (a 14 percent increase from today) and 70 percent plan to offer loan/debt funds (a 16 percent rise from today).
The survey also found asset managers favour cross-border distribution more than their global peers, with 76 percent of Asia Pacific managers expecting to launch more products for cross-border distribution in next five years, compared to 64 percent globally.
State Street found that Asia Pacific asset managers do see significant opportunities in the region.
Some 80 percent of them expect they will have distribution in Southeast Asia in the next five years, followed by 74 percent who expect to have distribution in Japan within the same timeframe, a 22 percent and 24 percent increase from today respectively.
While many regional asset managers recognise the huge growth opportunities in China, there are obviously still significant challenges, State Street said.
Some 60 percent of them think their products will be distributed in that market in the next five years, only 12 percent more than currently.
Mark England, head of asset management and insurance and sector sales, APAC at State Street, said: “Asset managers are increasingly focused on developing solutions for clients’ more sophisticated needs in the region. It’s clear from this data that multi-asset strategies and a wider range of alternative asset classes are seen as important to achieving this.”
He added: “In expanding their product range to include more complex strategies and widening their geographic reach, market participants will have to work more closely with regulators across multiple markets to ensure regulatory compliance as well as deliver on investor needs while at the same time maximising efficiencies and managing risk.”
“Building brand-awareness will continue to be a key component to success in a complex region such as APAC. It is a challenging environment for the industry but one which also offers an opportunity for a shift in approach, which will ultimately benefit investors as well as the industry.”
