Pimco's Asia Wealth Management Thrives as Asian Bonds Outperform Global Peers
Pimco is reportedly is experiencing remarkable growth in its wealth-management business across the Asia-Pacific region, with assets surging by 20% since the beginning of the year. This impressive expansion is primarily fuelled by the surging demand for fixed-income investment products, particularly as Asian bonds outperform their global counterparts.
According to data compiled by Bloomberg, an index tracking aggregate Asian debt has posted a substantial gain of 5.3% this year. In stark contrast, a similar index tracking U.S. bonds has seen a much more modest increase of just 0.41%. This stark discrepancy underscores the attractiveness of Asian bonds as rising interest rates in the United States and Europe have eroded bond prices elsewhere.
Marcio Bogoricin, Pimco's Executive Vice President, has revealed that wealth management assets in Asia, excluding Japan, have soared by a notable 20% as of August compared to the end of the previous year. This impressive growth has propelled Pimco's Asia-Pacific total assets under management for this sector to approximately USD60 billion.
The surge in demand for fixed-income investments can be attributed to the rise in interest rates, which has prompted investors to seek more stable yields. This shift represents a departure from previous trends when many clients in Asia were more inclined to chase aggressive returns in a volatile market environment. Additionally, Pimco is witnessing a growing trend among affluent individuals who are allocating a larger portion of their investments toward private credit opportunities.
Bogoricin underscored the appeal of fixed-income investments, stating, "A high-quality portfolio of fixed income today can get you around 7% yield, that's very attractive. Asian clients more broadly have been looking for more stable investments given a lot of volatility we've seen in markets over the last 18 months."
Pimco's unwavering commitment to crafting active fixed-income investment products in both public and private markets has solidified its reputation as a trusted asset manager, overseeing nearly $1.8 trillion in assets globally.
Notably, Pimco's clients in Asia ex-Japan are predominantly private bank clients, contributing about two-thirds of the total assets managed. Pimco currently serves clients across 14 Asian markets and maintains offices in key financial hubs, including Singapore, Hong Kong, Australia, Japan, mainland China, and Taiwan.
In response to the evolving demands of investors, Pimco introduced two private lending funds in Asia last year. These funds combine public and private credit assets, encompassing mortgages, corporate debt, and specialized financing like aviation or auto asset-backed lending.
The expansion of Pimco's wealth-management team in Singapore stands out as a testament to the growing interest in the region. Over the past three years, the team has expanded by approximately 30%. Furthermore, Pimco has been actively recruiting for additional offices in locations such as Hong Kong, Taiwan, and mainland China, though specific staff numbers remain undisclosed.
Notably, family offices in the area have also expressed a keen interest in increasing their exposure to hedge funds, according to Bogoricin.
In China, Pimco operates a wholly-owned enterprise capable of catering to qualified investors. The company offers two funds in this market—a hedge fund and a semi-liquid credit fund—both targeting annualized returns of 8% to 12%.
Pimco's Asia wealth-management operation, initiated around 2014, distributes its funds through private banks and retail lenders. Moreover, the company collaborates with online platforms such as Endowus Pte and Syfe Pte to make its investment products accessible to a broader audience of investors.
As Asian bonds continue to outperform their global peers amid the shifting global economic landscape, Pimco's steadfast focus on providing tailored investment solutions positions the company at the forefront of wealth management in the Asia-Pacific region.