Speakers from the Asia-Pacific wealth management industry gathered in Singapore recently to debate some of the most pressing concerns they have. Here is the first in a series of reports.

The potential for asset management in the Asia-Pacific market is still vast, even after years of growth, and there are also big gains to be made in selling Asia-based products into other regions, the WealthBriefingAsia Singapore Summit, held recently in the city’s renowned Raffles Hotel, heard from its keynote speaker.

“I am trying to tackle opportunities that have come about largely as a result of the financial crisis. After a seven-year hiatus, where we have recovered a lot of losses but not made any true headway….people have woken up to the fact that 57 per cent of GDP is derived from markets in which they have never invested into in the past,” Simon Hopkins, chief executive of Milltrust International Group, told delegates. “We have a stock market landscape which requires very deft asset allocation decisions,” he continued.

Referring to the scale of the local asset management market in Asia, he said that out of a global investment universe of $200 trillion in AuM, the global mutual fund market is worth around $30 trillion. Of this, the US has $15 trillion and Asia, $3 trillion; when Asia ex-Japan comes out of the figures, as does Australia, that leaves around $600 billion of AuM in other parts of Asia – not a particularly big figure, he said.

Hopkins referred to Milltrust’s own business, with currently around $200 million of AuM. "We are realising that the infrastructure that is in place is highly scalable,” he said

“We spend an enormous amount of time talking about Asian 'passports'…the real opportunity is to sell [Asian] products into the markets of the US and get ready for the big changes in Europe with the advent of the AIFMD,” he said, referring to the European Union’s recently enacted Alternative Fund Managers Investment Directive that governs sectors such as hedge funds and private equity.

Hopkins’ speech came ahead of a programme of three panel discussions and debates touching on issues ranging from investment challenges, maximising client conversion rates and onboarding, the future of wealth management technology, and how to judge the best international financial centres. Sponsors for the summit were Appway, Milltrust International, smartKYC, Vermillion, BVI Finance and the Financial Planning Association of Singapore. Supporting organisations were Standard & Poor’s MMD, ProFundCom and WealthBriefingAsia. (For more details about that event, see here.)

Hopkins noted how emerging markets had moved in close parallel leading up to and during the global financial crisis, but since then there has been a notable divergence: China and India have strengthened while Russia and certain Latin American economies have weakened.

One aspect of investing in emerging markets is that investors can be lazy when it comes to allocations, he said, opting to put money into a handful of global EM managers rather than the diverse regions that make up these markets. As a consequence, Hopkins said, the asset management business is dominated by a small handful of outsized participants offering index-type returns, which is not a sensible way to tackle such markets.

Milltrust International, which is regulated in the UK and Singapore, focuses on investment management expertise in emerging and frontier markets, as well as specialist real asset solutions. It delivers a dedicated emerging markets managed accounts platform in conjunction with State Street, the US financial services group.