BOCHK AM off to a flying start

AAM September 2011.qxd
2011/9/2
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BOCHK AM off to a flying start
Building on yuan-related business and expanding the product suite
By Hui Ching-hoo
OCHK Asset Management
(BOCHK AM), the wholly-owned
asset management arm of locallylisted Bank of China (Hong Kong)
(BOCHK), is leveraging on its
parent group’s resources in the
offshore yuan business to venture into
the wealth management market.
The firm has hit the ground
running since its inception seven
months ago and has put together a
team of 11, which includes Au King
Lun, who joined BOCHK AM as chief
executive officer in May last year.
According to Mr. Au, BOCHK
AM mainly focussed on the yuan bond
market to begin with and will further
diversify its product mix going forward. The firm is also strengthening
links between its parent group and
external fund managers in order to
expand its customer base. “The firm is
focussing on how to work with the
parent group to support its wealth
management initiatives,” says Mr. Au.
“The objective of setting up this
asset management company was to
help the group develop its services and
products for its customers. Our role
within the organisation is to provide
technical support such as market commentaries, third parties’ due diligence,
as well as highlighting technical issues
related to the sales process,” he adds.
Currently, a significant portion of
the company’s business is sourced
from the BOC Group Life, an
insurance entity jointly owned by
BOCHK and Bank of China Group
Insurance. The firm targets high net
worth individuals with asset of more
than US$1 million.
Product-wise, BOCHK AM is
stepping up its efforts on the yuanrelated business front. The firm
launched its first qualified foreign
institutional investor (QFII) dim sum
bond fund, the BOCHK RMB Bond
Fund, in March this year and has its
second yuan product, the BOCHK
B
Au King Lun
“The firm will collaborate
with the private banking
sector of the Bank of China’s
overseas branches to expand
its coverage to institutional
clients”
RMB High Yield Bond Fund, ready to
roll out, according to the company’s
CEO.
The BOCHK RMB Bond Fund is
distributed via private placement,
says Mr. Au, who reveals that the firm
has outsourced management of the
fund to Aberdeen Asset Management.
The product has exposure to the yuan
bond sector through onshore and
offshore yuan bond markets, as well as
yuan hedged offshore in US-dollar
bonds.
The fund’s objective is to generate
long-term capital growth and income
in yuan by investing primarily in debt
instruments, debt products, deposits
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Michael Ha
and other fixed-income instruments
that are denominated in yuan, hedged
to yuan or otherwise have exposures to
the currency. Mr. Au says the product
is targeted at high-end retail and
corporate clients.
Michael Ha, head of marketing
and client services at BOCHK AM,
says the fund has so far been wellreceived because of its low-risk
fixed income feature. The firm will
collaborate with the private banking
sector of the Bank of China’s overseas
branches to expand its coverage to
institutional clients.
In the longer term, Mr. Au notes
that the firm intends to widen its
product offerings to include balanced
products, lifestyle funds, and alternatives. In addition, he isn’t ruling
out the possibility of working with
BOCI-Prudential, the consortium
between BOCHK’s parent group,
Bank of China, and Prudential plc, to
develop exchange traded fund (ETF)
products.
“We aim to be the solutions
provider for the bank’s clients. If we
don’t have the in-house capabilities in
some areas, we’ll outsource to third
party managers,” says Mr. Au.
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