A number of firms have announced hires, ventures or made moves that underscore how the jurisdiction is generating more attention recently. We speak to a US firm that recently partnered with a business to widen its coverage.

There appears to be a cluster of Western and regional Asia players setting up shop in Taiwan or expanding existing operations in the jurisdiction.

And while the companies in question are unlikely to state so publicly, one cannot help wonder whether mainland China’s recently imposed national security law on Hong Kong, which has sparked international controversy, might have encouraged some businesses to think of alternative markets. 

In August, US-based Thornburg Investment Management pushed into Taiwan’s high net worth market by partnering with Concord Capital Management.

BNY Mellon Investment Management, one of the world’s largest investment managers with more than $2 trillion in assets under management, has stepped up operations in Taipei, the Taiwanese capital, having won a Securities Investment Consulting Enterprise business licence.

Thornburg has been building a Taiwan presence for “several years”, according to its president and chief executive, Jason Brady. Based in Santa Fe, New Mexico, Thornburg is a large organisation, if not an industry titan – it oversees $41 billion in client assets.

“In addition to Taiwan’s fund market size and expected growth, the desire for income-producing investment strategies along with expertise across geography and sectors aligns with solutions on Thornburg’s investment platform,” Brady said. 

The country has plenty of wealth to manage. Taiwan’s high net worth and affluent population accounted for just over a quarter of its adult population in 2018 (source: Market Research.com). The segment held more than 80 per cent of Taiwan’s total onshore liquid assets. Deposits maintained their dominance in Taiwan’s retail investment portfolio, reaching a value of $1.1 trillion in 2018.

Some of the big banks in the region cover Taiwan. For example, back in early July, Singapore-based DBS appointed Peter Tung as head of private banking for Greater China, taking over the reins from Januar Tjandra, who retired. Tung is responsible for managing and developing DBS' private banking business in Hong Kong, Macau, mainland China - and Taiwan. In August 2019 BNP Paribas Asset Management appointed former Fidelity senior figure Rick Chen as its Taiwan chief executive. 

Taiwan is one of the Asian “Tigers” and, notwithstanding its sensitive geopolitical status – mainland China wishes to bring it back into the fold – its economic muscle and wealth make it an attractive market for certain institutions. It is, for example, a big technology player. 
 

Thornburg’s Brady sees the Taiwan move as part of a wider Asia strategy. 

“We are taking a measured approach to each market across Asia. Last year, Thornburg established an office in Hong Kong and earlier this year, Thornburg received QDLP [Qualified Domestic Limited Partner] status in China. In each of these markets, demand for differentiated and actively managed investment strategies has been consistent. Institutional investors, along with local and global private banks and wealth managers, have welcomed our philosophy and away-from-Wall-Street perspective. We think the future is bright in Asia,” he said. 

Demand for what Thornburg has to offer, its ability to shift amid the pandemic has been a plus, he said. 

“Although high-yield strategies have increased in popularity over the past five years, the pandemic prompted a shift in allocations to higher grade bonds for capital preservation. Given the recovery of global stock markets since the lows in March, equity strategies have largely rebounded and remain appealing to investors,” he said.

“With the pandemic feeding market uncertainty, attention in Taiwan is turning from high-yield strategies to global bond solutions that include both investment grade and high yield. While yields remain low, we think this prudent approach can continue to generate the income investors expect with better risk-adjusted performance. We believe that alternative investments can offer diversification for high net worth investors, with particular focus on private credit and real estate opportunities,” Brady continued. 

And no exploration of wealth management is complete these days without mentioning environmental, social and governance-driven (ESG) investment. 

“Already a key focus at institutions in Taiwan, I expect high net worth investors in the market to place greater importance on ESG in the future,” Brady added.