Faced with challenges in fundraising in their home markets in 2016, Asian managers are striving to tap opportunities in new markets.
The fund industry in Asia faces the daunting task of convincing conservative retail investors to increase their risk profiles.
Investors' cautious approach is reflected in distributors' search for low- to medium-risk fixed-income products, even as they increasingly strive to promote equity funds.
We Are Different
Additionally, managers face product on-boarding challenges as it has become increasingly difficult for new entrants or small and mid-sized firms to get onto banks' platforms.
A key challenge is differentiating products as it is not going to be an easy task to pitch plain-vanilla products to distributors.
Finding The Product Niche
These are among the key findings of Cerulli Associates' newly released report, Asian Distribution Dynamics 2017: New Horizons Await - Venturing into Overseas Markets.
Cerulli's research provides insights into product ideas that distributors are looking for, which will help managers in meeting these product gaps, though fixed-income funds will continue to be part of product promotion plans to meet the income needs of investors.
Distributors Know Best
Partnership is a key expansion strategy adopted by both global and Asian fund houses. Many Asian firms are eyeing expansion in Hong Kong and Japan, markets closer to home, as well as Europe, while most global firms are focusing on the Southeast Asia ex-Singapore markets.
A stark difference is that global firms are far more open to white-labelling their funds than their Asian peers.
The key success factors will be exploring product gaps by meeting distributor needs and aligning business strategies with a rapidly evolving regulatory environment.
