AXA Investment Managers – Investing and Building for Asia’s Future
Terence Lam is Managing Director, Head of Sales & Marketing Asia at AXA Investment Managers, a role he has been enjoying since taking it on in 2010. A well-known figure in the wealth management community within the region, Lam comes across as an optimist, and that certainly shows through in the many global and regional initiatives the firm has underway, from Taiwan to Thailand and in several other countries in Asia. During lockdown, he has enjoyed more time with his young family, and also managed to chip away at his golf handicap again. But he has not taken his eyes off the corporate goals he had set for the firm in Asia several years ago, some of which are close to realisation in 2020, despite the hiatus in global business and indeed in social and family life. Hubbis had the opportunity recently to catch up with him by video link, and we heard of well-strategised plans that are evidently being well-executed.
On February 12 this year, AXA Investment Managers (AXA IM) announced the hires of six important new senior executives joining the firm’s retail, wholesale sales and marketing teams. “This was part of the strengthening of our distribution and marketing and to help realise our multi-year plan to grow the presence amongst private banks and retail networks in this region,” Lam explains. “Hence, we added three new sales directors, a Head of Marketing, and two newly created associate director roles. This is part of our vision of the wealth management industry’s rapid growth over the next five years.”
To better serve the growth of this private wealth in Asia, the new additions will boost AXA IM’s private bank client relationships in the region, as well as build up the distribution partnerships with retail intermediaries in Hong Kong, and with wholesale segments in Taiwan and Southeast Asia.
“We also strengthened our marketing team to enhance our drive and brand awareness and improve the client experience via digital channels, thought leadership and events. All these hires will, we believe, bring real value to our already strong and growing business in Asia and underline our real and growing commitment to this region.”
Asia’s central role
“Asia is a key market for us, and the firm’s priority is to continue to develop our business in this region,” said Bruno Guilloton, CEO of Asia Pacific, at the time of the release. “The new and expanded team reflect AXA IM’s multi-year commitment to deepen our presence in the region. We are here to provide our clients with active, long-term, and responsible investments that they need today in order to create a better tomorrow.”
AXA IM is an active, long-term, global, multi-asset investor, and according to the firm’s literature, works with clients to provide the solutions they need to help build a better tomorrow for their investments, while creating a positive change for the world in which we all live.
With approximately USD882 billion in assets under management at the end of March this year, AXA IM has over 2,360 employees around the world and operates out of 28 offices across 20 countries. AXA IM is part of the AXA Group, a world leader in financial protection and wealth management. AXA IM has been operating in Asia since 1998 with offices in Hong-Kong, Singapore, Sydney, Tokyo as well as in Shanghai, Seoul and Mumbai.
Of the group’s AUM, around 40% is in Fixed Income, 29% Multi-Asset, 8% in Structured Finance, 12% in Real Assets and 7% in Equities as of March this year.
Lam adds some further detail and colour on AXA IM, noting that the firm is a “100%-owned subsidiary of the AXA Group, which has its HQ in Paris. A lot of our investment experts are also based in London, focusing primarily on fixed income and on equity via Framlington Equities and London is also where our global head for marketing sits. In the US, we have Rosenberg Equities in California, and in Connecticut, our US high yield and our US fixed income capabilities, and I can describe those as some of our flagship strategies.”
Expanding in Asia
He explains the firm’s Asian HQ is in Hong Kong, and they have three joint ventures in Asia, in India, Korea and China. “Our regional headquarters is sitting right here (Hong Kong) at One Taikoo Place. In Singapore, Rosenberg Equities has operated there for over 27 years, and AXA IM also has sales and client service representatives there. We also have offices in Australia and Japan.”
Lam explains that AXA IM has a global reputation for its fixed income platform and has over many years built a remarkably strong profile for equity, structured finance, multi-asset solutions, and alternative investments.
“We have been able in recent years to really become known as a thematic equity house regionally and globally, as well as a fixed income powerhouse,” he shares.
Themes to the fore
He looks through the mists of the pandemic to confirm that the key trends for the business remain intact. “But during the lockdown,” he reports, “we have seen a big upsurge in investor focus on particular investment themes, so, for example, the digital economy, which from all of our experiences in business and social and family life since this crisis is plain for all to see. This demand is coming from all types of investors, from the major institutions, to private banks and everyone else.”
ESG has also received a major flip. “Having started out in this region in Australia,” Lam reports, “it has become more popular in Japan and now further across the main countries of Asia.”
“ESG comes up in roughly three-quarters of all discussions with asset management clients, whether Thai, Malaysian, Filipino, or maybe the sovereign wealth funds or central banks, and so too with distributors, private banks. For example, just yesterday, I was speaking to a central bank, and they asked me about some sort of training arrangement for them, with a specific focus on ESG.”
“That does not mean they will adopt ESG widely right now, but they are certainly warming up to it.”
Lam shares that after the March sell-off, more and more clients are also interested in high-yield, a major specialisation of AXA IM globally. And unconstrained fixed-income solutions are in continuing high demand, playing again into the firm’s historical strengths. And he also highlights the strong interest in the firm’s Asian bond strategies.
Regarding thematic plays, Lam points for example to the Framlington Equities platform, which several years ago started with RoboTech, a strategy strongly slanted to Japan, and since then the firm has built newer thematic plays, including the digital economy, FinTech, women empowerment, clean economy, evolving global trends, and most recently a China evolving trends strategy.
Courting the global distributors
Lam explains that AXA IM is on a global drive to expand in the retail and wholesale segments, and is focusing considerable effort on the global distributors, especially major private banks, with Asia also benefitting from this worldwide initiative. “I have also established a dedicated private bank team out of Hong Kong and Singapore since last year,” Lam explains, “so we focus both on the global and the regional private banks to boost our relationships, flows and most importantly client service quality.”
On the retail front, the efforts are more selective, with Hong Kong, Taiwan and some Southeast Asia markets as key locations. For example in Taiwan, AXA IM, having already appointed a new private placement agent to help expand our presence in the institutional and advisory space, we are also in the process of forming a solid master agent partnership with a local agent for more retail opportunities, which is currently subject to regulatory approval. “That will be our gateway to Taiwan,” he says, “so it is an exciting development, but we humbly await news from the regulators.”
Southeast Asia in the sights
Thailand is the other market for the retail sector expansion. “We have done well there in recent years, and have participated in close to 20 launches of feeder funds or fund of funds with local asset managers,” he reports. “The strategies mirror some of our fixed income, high yield and thematic equity strategies globally, and there is also strong demand for the global sustainable equity strategy. Thailand remains a very important market for us, and one of our recent hires was a Thai national who is based in Hong Kong to cover southeast Asia with a big emphasis on Thailand. Elsewhere in Southeast Asia, we are eyeing on Indonesia, Malaysia and the Philippines.”
Education – a vital key
Lam comments that in the current environment, flexibility is essential, as well as keeping a constant tab on client needs and expectations. “A major initiative we began almost two decades ago,” he adds, “is investor education. And we are working with the regulators to encourage exactly that, for example, the SFC in Hong Kong. There are so many changes taking place, for example in the way we sell, the digital distribution platform, smartphone apps and so forth. Agility in the way we communicate with clients is essential. So we are constantly adapting.”
Lam stresses that AXA IM is in the market for the long haul and takes great care over its reputation.
“We put a lot of emphasis on risk management and compliance, and certainly with our long-term view, investor education is really key. This is not only about educating investors on our funds; it is also about how we do things, our ethics, how we manage the business, how we handle the investment management, in short improving their understanding and their comfort levels. In this way, it is a win-win situation, as everyone - ourselves, the investors and the regulators – are in communication and comfortable.”
Lam closes the discussion by reiterating his optimism that the key drivers of the AXA IM business remain intact, despite the pandemic. “We believe that this region (Asia) will continue to be one of the strongest,” he states, “so Asia remains vitally important to AXA IM’s future. We are here for the long, long-term.”
Lam’s Key Priorities
Taiwan is one of the key priorities for the firm in Asia, with Lam waiting for the regulatory approval of the new master agent agreement there. “We are going to be supporting the market not only from a product and sales perspective but also from a marketing perspective,” he reports. “We see great opportunities in Taiwan, a dynamic market, and we hope to offer our investment solutions to the investors there.”
Secondly, Lam wants to cement existing and build further relationships with global and regional distributors. “We are well on track in this endeavour, and we are now moving further into some of the key selling strategies, building on the extensive groundwork which we have done in the past two to three years. This is the year when that all comes together and the plan is fully executed.”
Thirdly, Lam wants to build out the brand and activities in selected countries in Southeast Asia, an area he says that is central to growth in the retail and wholesale funds industry. “I’m eyeing on Thailand, Malaysia, Indonesia and the Philippines,” he reports.
Getting Personal with Terence Lam
Prior to taking on his current role at AXA IM back in 2010, Lam had built a successful career in the financial markets. He was formerly Head of Institutional Sales for Asia at BNP Paribas in Hong Kong, and before that had also held senior business development and product management roles at Franklin Templeton, Deutsche Asset Management and Credit Agricole Asset Management.
He was born in Hong Kong and studied at Sydney University, before later moving to London for his BSc. in business studies at Imperial College, University of London some 22 years ago.
He says he has enjoyed every step of his career to date, and quips that despite having worked for three French financial groups, including AXA IM of course, he has still not mastered the French language.
Married with two children, and loving every moment of the childhoods of their daughter aged nine and son aged seven, Lam says that a family of four is an ideal number for him and his wife. “I am in asset management,” he jests, “which means two children through to university and beyond is plenty enough costs ahead!”
With the lockdown, Lam has been spending more time with the family, which he says has been a great positive out of the crisis. “And I have been able to get out and do a bit more golf than usual at weekends,” he adds, “so my handicap is finally coming down. It is now 17, and there is always hope I might get a bit lower (14 was his pre-marriage handicap).”
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