Pimco gearing up to target trillions worth of Asian funds

HONG KONG • Pacific Investment Management (Pimco) is seeking to expand in an increasingly affluent Asia.

The US$1.5 trillion (S$2 trillion) money manager is in the process of hiring more than 20 people in marketing, operations, legal and compliance teams in the next two years to help cover major retail banks in Hong Kong and Singapore.

It also intends to target newer markets such as Thailand, Malaysia and the Philippines, according to Mr Eric Mogelof, Pimco's Hong Kong-based head for Asia-Pacific.

The wealth of high net-worth individuals grew 10 per cent to US$17.4 trillion in the Asia-Pacific region last year, exceeding the US$16.6 trillion figure in North America for the first time, consulting firm Capgemini estimates.

The region's 5.1 million people with more than US$1 million in investible assets excluding their primary residence beats the 4.8 million in the United States, it said.

Investors from China have been fleeing a falling yuan, with Goldman Sachs estimating a net outflow of US$55 billion in July.

"Private wealth in Asia excluding Japan continues to grow very quickly, so it makes sense for us to dedicate more resources to those markets," Mr Mogelof said in interview.

"Most of our hiring in the near term will be in the Asia ex-Japan wealth management space, which means retail banking and family offices in Hong Kong and Singapore." Both places have benefited from funds flowing out of China to seek dollar-denominated assets amid a weakening yuan.

Pimco's wealth management in Asia ex-Japan has experienced "significant" growth in net inflow this year. "We have seen more Chinese money find its way to offshore markets," Mr Mogelof said.

"Wealthy Chinese are looking to private and retail banks offshore for global investment strategies."

Pimco does not have an office in mainland China and has been working on a business plan to establish the onshore presence, he added.

"Given China's diminishing barriers to entry and positive wealth dynamics, we expect to increase our penetration in both the retail and alternatives spaces."

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A version of this article appeared in the print edition of The Straits Times on August 31, 2016, with the headline 'Pimco gearing up to target trillions worth of Asian funds'. Print Edition | Subscribe