Chris Ryan is managing director of Asia at Fidelity International. He joined in January from ING Investment Management, where he was chief executive in Asia.
What is your strategy for Asia over the next few years?
Asia continues to be a critical growth area for Fidelity. We’ve been here for nearly 40 years so we have a long-term strategic commitment to the region.
We’ve done well in the more developed markets in the region but rapid growth in China, India and other markets is providing the basis for new opportunities for us.
While retail funds delivered through banks, IFAs and insurance companies still make up the largest proportion of assets under management across the region, institutional assets and wealth management have been growing at an increasing pace. From our perspective, growing our business into these segments is a key priority for the next few years.
In terms of specific platforms, we’ll absolutely continue to focus on the retirement market, but we’re also now lifting our efforts in fixed income and other asset classes moving forward.
The Asia region is thriving – investment appetite is still strong, the region has high savings ratios, large foreign reserves and investor behaviour is moving towards longer term investing.
What are your expectations for Asia growth for your company for the rest of 2008, and over the next five years?
The scale of wealth creation in India and rapid urbanisation and growth in consumer demand across China will yield enormous opportunities over the next five years.
As there are more entrants, there will be more competition and markets will gradually become more efficient. As they gain more experience, individual fund investors will become more discriminating between managers and consistent, competitive investment performance will become more important to them. Markets across the region are already starting to switch
from being solely IPO-driven to become more focused on relative performance.
Our fundamental investment approach is based on being a bottom-up stock picker so we believe we’re in an excellent position to continue to produce strong consistent results in Asia.
Do you plan to launch any new products in Asia over the next 12 months?
We’ll be looking to roll out new products on the retirement front as we see this as an excellent long-term fit with our business model. We’re also looking at more products for the institutional market, as well as increasing the fixed income side of our business. Currency is going to become a key focus for institutional investors and finding assets that produce positive returns in a strengthening Asian currency environment will be a priority for all clients.
What are the key trends in fund management in Asia today?
Having lived and worked in Asia for over more than a decade now, through a couple of cycles, I believe that the market growth is set for a much more competitive phase. It’s no longer good enough to be a source of beta as investors now have a large number of alternative sources for market exposure. To add value in Asian markets, it will be much more important to be efficient
and control risk compared with the past.
There is a lot of discussion about ‘de-coupling’ between Asia and the rest of the world but this is not a good way of looking at this complex issue. The real perspective is that the balance of power in financial markets has already shifted, almost without developed markets noticing, as domestic economies in Asia begin to overtake their Western counterparts. Even without adjusting for local prices and taxes, Asia has more than doubled its relative economic position in the last decade.
The coming year will really test international fund managers as they deal with the US slowdown/recession, a weaker dollar, outcomes of the credit crunch and volatility in asset prices. So in 2009, you’ll see the best managers come through: the ones who saw the dips this year as good opportunities to make a call, and create true value for shareholders.
© funds europe 2008