Hugh Wheelan looks at the results of a new survey

Hong Kong is still the investment hub of Asia with over a third of the 100 RCP Asian Top 100 managers for 1998 retaining an important base there (see pages 26 and 28).

This comes despite a gradual loss in Hong Kong's share of the regional market over the year to subsidiaries of its own houses, as well as local and international newcomers in other Asian centres.

Although the number of Hong Kong managers in the Top 100 dropped to 36 in 1998 from 39 in 1997, showing a 14% fall in assets under management from $66.1bn to $56.8bn, Hong Kong still boasted two new entries into the top 25.

Lloyd George Management of Hong Kong came in with $2bn under management, as did Skandia Asia, also based in Hong Kong, with $1.4bn.

However, 1997's Top 100 leader in assets under management, Jardine Fleming Investment Management Limited (Hong Kong) slipped into third place this year, currently holding $12.7bn.

Schroder Investment Management Group though, which shares its investment base between Hong Kong and Singapore, moved from seventh to fourth place over the year.

Among the Top 100 firms surveyed, over two-thirds shared their regional investment decision bases on a similar Hong Kong or Singapore, or both, basis.

Indeed, Hong Kong could soon have Singapore nipping at its heels in terms of total pools of assets available for independent management, if Singapore's Central Provident Fund, estimated at $68bn, and increasingly opening up to external management, is taken into account.

The RCP survey also shows Hong Kong to be the second most popular market for investment in Asia behind Malaysia, with 59% of managers choosing to invest there.

Macau, soon to be Hong Kong's sister Special Administrative Region, attracted the attention of only one manager though.

Generally, 1998's results confirm the continuing regionalisation pro-cess in Asian investment, with more than 60% of managers invested in South East Asia and Taiwan. Subsequently, Korea and Australasia attracted less than 50% of managers, with the Indian sub-continent covered by around 40%.

In terms of asset concentration during the year, the top 25% of investment managers increased their handling of the overall Asian asset market from 75% to 84%, with the last 25 holding just 1% between them.

Furthermore the top five managers managed almost one half of all assets, or some $80bn from a total of $172.7bn.

However, despite the inclusion of three new countries, South Korea, Indonesia, and the Phillipines, and 50 new managers in the RCP survey database, the region-wide collapse in securities prices and currencies following the Asian financial crisis in the summer of 1997, caused total assets under management to fall from $183bn in September 1996 to $172bn in 1997.

While the Asian asset management industry's immediate outlook re-mains cloudy as international invest-ors stay away, long term prospects appear rosier due to the continuing growth of Asia's domestic pool of savings.

Pressure on the region's governments since the 1997 crisis to liberalise domestic capital markets and open up national savings to a broader range of investment choices, is also playing a major part in developing this growth platform.

Although small by European or North American standards, growth of the region's retirement schemes seems assured by the combination of public policy, economic development and demographics, with total assets of more than $200bn predicted by the year 2000.

As this is being accompanied by increasingly widespread moves to external, professional management of these assets, mirroring the development of new investment services such as fund tracking and performance measurement in the region, the underlying health of the Asian investment management industry seems assured.

The RCP survey, which covers 230 investment management firms in Asia, gives ranking in terms of assets under management on the Asian continent, as well as providing details of each investment firm's owners and alliances, the range of services it provides and its contact details.

The full results are being published in the 'FT Guide to Investment Managers in Asia'.

Topics