Nikko Hiring in Asia as Assets Surge 51% Since Crisis, CIO Says
Nikko Asset Management Co. plans to hire money managers in key markets like China and Southeast Asia at a time of record inflows into emerging markets, boosting headcount as European and U.S. banks contract.
The biggest Asia-based fund manager is keen to add specialists in equity, fixed-income and alternative investments after buying competitors in Singapore and Australia over the past two years, according to Yu-Ming Wang, chief investment officer for markets outside Japan. He declined to say how many people would be taken on by Nikko, whose assets under management jumped 51 percent since the height of the global financial crisis in March 2009 to $154 billion at end-2012.
“We have a lot of capability and scale on the ground across Asia including Australia,” Wang said yesterday by phone from Tokyo. “A big portion of our headcount, about 40 percent, sits outside Japan and it’s our opportunity to shine.”
Investors plowed a record $57 billion into emerging-market bond funds in 2012 and $47 billion into equities amid Europe’s debt turmoil and monetary easing that drove U.S. bond yields to near zero, according to EPFR Global. Banks worldwide have announced at least 300,000 job cuts since 2011 as trading slumped, according to data compiled by Bloomberg.
At the same time, Nikko spent $233 million buying Tyndall Investment in Australia in November 2010 and DBS Asset Management Ltd. in Singapore in September 2011, adding some $35 billion to its asset pool. It owns minority stakes in Rongtong Fund Management Co. in China and HwangDBS Investment Management in Malaysia. Nikko employed 733 people at the end of 2012, a 40 percent jump from 2010.
Taiwan-born Wang, 47, joined Nikko on Jan. 7 after spending more than three years managing Asian bonds at Manulife Asset Management in Hong Kong. He graduated in engineering from Massachusetts Institute of Technology and his career included a stint as head of investment banking in Asia at Wachovia Corp.
“As the newest person in the management team, I won’t be surprised if we keep looking for complementary assets,” Wang said in an earlier interview on Feb. 20 in Singapore. “Not every banker is a good fit for the buy-side but it definitely helps to be on the hiring side.”
Apart from Japan, Wang said he considers China, Southeast Asia and Australia as key growth markets for Nikko. It’s “too early” to provide specific hiring targets, he added.
Wang is tasked with expanding the fund manager’s global investment capability and developing new strategies in growth areas such as alternative fixed income and bank loans. Sumitomo Trust and Banking Co., a unit of Japan’s fifth-largest banking group, bought Nikko from Citigroup Inc. in 2009.
Wang said he sees opportunity to expand the team that invests in Asian speculative-grade bonds, which account for about 30 percent of the $500 billion dollar-denominated bond debt in the region. Nikko oversees more than $1 billion of junk bonds. Its flagship Asia High Yield fund returned 22 percent in 2012, beating 94 percent of peers, according to Bloomberg data.
“The focus on income is going to be a long-term trend, it’s not going away whether the market is up 5 percent or down 10 percent,” Wang said. “We have to be good at this. Generationally, investors are now closer to their retirement.”
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