Study highlights challenges to Asian Ucits distribution
Hong Kong, Singapore and Taiwan remain the most attractive destinations for Ucits distribution in Asia, a survey shows.
However the research, which was carried out by BNP Paribas Securities Services and specialist consultancy Knadel, also highlights issues such as fragmentation, regulation and differences in culture that affect the take-up of Ucits in the region.
About three-quarters of respondents say their experience of distributing Ucits vehicles in Hong Kong, Singapore or Taiwan met or exceeded their expectations.
Some 29% of the 50 asset managers surveyed are already distributing in Hong Kong, while 21% are active in Taiwan and 20% in Singapore.
These locations benefit from “a strong asset management network, the experience of a large talent pool, and the infrastructure necessary to support distribution”, the research adds.
However, the time and cost of registering Ucits funds in these hubs was cited as a significant challenge, while the speed of approvals of Ucits in Hong Kong appears to have recently slowed. (article continues below)
Malaysia and South Korea were identified as rapidly maturing Ucits markets, with a respective 8% and 12% of respondents already distributing in the countries.
Malaysia’s asset management industry is seen as small but “relatively sophisticated”, while South Korea presents challenges in terms of language and culture but is noted for its business opportunities.
The study also shows 9% of asset managers are currently distributing Ucits fund in Japan or plan to do so. Despite the lack of business interest in distributing Ucits in Japan, assets under management have shown steady growth over the past ten years.
Mostapha Tahiri, head of asset and fund services Asia at BNP Paribas Securities Service, says: “Ucits is an excellent framework that has brought confidence and harmonisation to global asset management.
“While the take-up of Ucits in Asia has been successful, our research concludes that key challenges remain.”
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