We Want To Be Worlds Local Asset Manager

Updated: Nov 16 2003, 05:30am hrs
HSBC (India) Asset Management Pvt Ltd has carved a niche for itself in the minds of Indian investors with a growth of over 250 per cent in six months. During a special visit of the Indian asset management arm HSBC Asset Management Ltd CEO Alain Dromer spoke to Gargi Banerjee of The Financial Express about the growing market share of emerging market funds and why the India story is convincing investors abroad. Excerpts from the interview:

At a time when the going is good for the Indian markets, what has been the unique selling proposition of the schemes housed under HSBC (India) Asset Management Ltd
It is indeed a very exciting time in India with the equity markets growing on strong fundamentals and we in the HSBC group are positive that a lot of opportunities are yet to be unearthed even now. Our entry in the asset management business in India was quite timely, and we can claim that we spotted opportunities at an early stage. Our policy in India has been to make the best use of the domestic capabilities for best growth and this is the reason why we have achieved success in a short span of time.

Is there any underlying strategy for the asset management business in the markets across the globe
For our asset management business across the globe we do not try and sell our best products. Instead, we have a clear strategy of developing a base by building a local team for a particular market, who are well-versed with the local rules and have the best feel of the markets. Once we build this platform we believe in networking globally, where the heads share their experiences and benefit from each other.

We are led to believe by global experts that the concept of cross-border sales is on the rise. What does it mean and how is it applicable to the HSBC group
The concept of cross border sales, or non-local sales is indeed on the rise. This is a very powerful concept, as you can sell the local capabilities or expertise for the sale of global products. For instance, we have an emerging market team based in London, that takes the advice of Indian fund managers for the sale of a Luxembourg-based emerging market fund. This idea is then conveyed to investors worldwide who then develop faith in our global process. This is attune with what the rest of the world is doing today. Markets are increasingly being globalised and everybody realises the importance of being diversified.

What makes HSBC asset management stand apart from the asset management business across the globe
The HSBC Bank is known to promote itself as the global-local bank. Much in the same lieu, in the asset management business we would like to term ourselves as the worlds local asset manager. To cite an example, we might say that we are fast growing Indian asset management company completely integrated in the global firm. Across the globe, we ensure that the value attached to HSBC brand is conveyed to every single customer.

In a market with n-number of products, what would you do to convince the investor that an HSBC product is the best and should be a part of the investors portfolio
That is exactly where the HSBC philosophy and process play the key role. The fact that we are an active fund manager with a top-down approach in asset allocation and a very strong content of bottom-up stock selection. This philosophy holds true for every HSBC asset management arm across the globe. The top down approach is more important in the balanced funds, but it also applied to single asset funds, because it is important to know which macro economic context are you taking into consideration.

There is, of course, a framework which is chalked out by the Global Investment Strategy Group that gathers around our Chief investment Officer. This group who shapes the macro- economic or macro-financial strategy that is then conveyed across the globe.

This is then translated by the fund managers in the local context. Then we also have the bottom up stock selection that is also a very structured process.

Tell us something about your Global India Fund (GIF) Fund Is it the fastest growing among its peers in the emerging market category
In the universe of over 30 emerging market funds India dedicated funds are now catching the attention of typically conservative institutional players from over the world. Leading the pack of these emerging market funds is the HSBC India GIF Equity Fund housed under HSBC Asset Management India Pvt Ltd which has has witnessed a jump of nearly 400 per cent in its corpus size from Rs US$ 90 million to US$ 445 million from November 2002 to October 2003. We have witnessed a huge growth in the corpus of the fund on the back of the India story which is making waves abroad. Moreover, we invest in a broad kitty of stocks and give the investors the benefit of diversification through this fund. Even when equities are par excellence in markets of US and Honk Kong we are witnessing a novel trend among investors in this fund to shift to India based fund like ours.

Has the share of emerging markets gone up in the last one year If so, how much has India contributed to the growth
The concept of the emerging markets in the past few years has been in trouble and that is why we have not seen any rise in the share of emerging markets. However, we believe that this is a long-term story and will get investors interested over a period of time. As for India, it does feature among the top five. A good example of this is the rising inflows into the offshore funds that is housed under various Indian AMCs.

What are your growth plans in India Do you have any plans of irorganic growth in India at this stage
I believe that we are still in a stage when we are still building our base in India. We want to have a wide range of products, with a flavour of the local markets that will build our AMC brand in India. We are at a stage where any acquisitions would not be difficult, but quick growth is not the foremost on our minds at this stage. Acquisitions would only disrupt the growth process in India at this stage.