THE CERULLI REPORT. Asian Business Strategies Making the Breakthrough LOOK INSIDE TO PURCHASE. Overview. Benefits. Subscription Information

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1 THE CERULLI REPORT Asian Business Strategies Making the Breakthrough Overview This report analyzes viable entry and expansion strategies for asset managers in Asia, including Japan but excluding Australia. It aims to help asset managers size the pool of retail and institutional assets they can access, and consider different approaches to different markets, depending on regulations, company goals, and budgets. We also analyze the competition and opportunities in the retail and institutional space before wrapping up with our conclusions and some recommendations for fund houses looking to succeed in the region, based on best practices that Cerulli has observed. Where relevant, case studies on specific companies as well as extended notes on key related issues are interwoven into the chapters. Benefits Analyze the viability of setting up an onshore presence versus serving investors from an offshore base Identify subadvisory opportunities in Japan and Southeast Asia Evaluate the successes and failures of joint ventures and mergers and acquisitions Questions Answered 1. How large are Asia ex-japan s assets under management in both retail and institutional spaces and how are they expected to grow? 2. What are the pitfalls that global managers should be mindful of when going onshore? 3. In which country does an offshore strategy make more sense, and why? 4. What are the distribution opportunities as well as challenges that can arise as a result of the impending mutual recognition arrangement between Hong Kong and China, and the ASEAN fund passport? 5. How can managers attract the attention of big institutions and win business from these institutions? 6. Is a joint venture still the best way to access opportunities in China? 7. How can fund houses operate successful retail businesses in Japan without an onshore presence? 4 TO PURCHASE CALL info@cerulli.com VISIT HAVE US CONTACT YOU: Subscription Information $15,000 Hardcopy Digital in color Unlimited online firm-wide access Exhibits in Excel Key findings Analyst support LOOK INSIDE 9 pages of report content attached 112 pages, 46 exhibits

2 Index of Exhibits INDEX OF EXHIBITS Chapter 1: Sizing the Opportunities 1. Asia Ex-Japan Mutual Fund Assets Under Management, Asia Ex-Japan Institutional Investable Assets Under Management, Snapshot of Asset Management Industry in China, Snapshot of Asset Management Industry in Taiwan, Snapshot of Asset Management Industry in Korea, Snapshot of Asset Management Industry in India, Comparison Between Hong Kong s Professional Investors and Singapore s Accredited Investors Neuberger Berman s Funds Sold in Taiwan, March Chapter 2: Going Onshore 9. Regulatory Requirements to Establish a Fund Management Company in Asia by Country, Fund Management in Southeast Asia at a Glance, Asian Mutual Fund Assets Under Management by Domicile, 2009 March Local vs. Foreign-Owned Fund Management Companies by Marketshare, Local Indian Fund Managers Assets Under Management, 2012 March Smallest 10 Mutual Fund Managers in Indonesia by Assets Under Management (AUM), March Key Events in Threadneedle Investments Asian Expansion, 2010 June Chapter 3: Staying Offshore 16. Japanese Investment Trust Asset Under Management Outsourced to External Managers, 2000 June Outsourced Share of Investment Trust Assets Under Management by Fund Category, June Subadvisors Ranked by Subadvised Assets Under Management, June Snapshot of Foreign Asset Management Companies and Their Master Agents in Taiwan, June Largest 10 Master Fund Managers for Thai Feeder Funds, March Largest 20 Feeder Funds in Malaysia by Assets Under Management, March Japanese Mutual Fund Net New Flows, 2009 June 2014 YTD...54 The Cerulli Report Asian Business Strategies

3 Index of Exhibits Chapter 4: Sizing Up the Competition Retail 23. Asia Ex-Japan Mutual Fund Assets Under Management by Country, E Cerulli s Rating of Factors That Aid Success in Asia s Fund Management Industry, by Importance Snapshot of Fidelity s FundsNetwork in Hong Kong, March Chinese Fully Operational Joint Venture Assets Under Management, 2013 March Part or Wholly Foreign-Owned Indian Fund Managers Assets Under Management, 2013 March Largest 10 Indian Mutual Fund Managers, 2012 March Largest and Smallest 10 Mutual Fund Managers in Indonesia, March Snapshot of Selected Companies with Operations in Singapore, Thailand, and Malaysia, March Largest 20 Mutual Fund Managers in China, March Selected Online Fund Investment Platforms in China, March Cerulli Asset Manager Survey Respondents Views on Which Client Segments They Are Most Keen to Tap Over the Next Three Years, Chapter 5: Sizing Up the Competition Institutional 34. Asia ex-japan Addressable Institutional Assets by Country, 2013E 2017E Asia ex-japan Percentage of Institutional Assets Outsourced by Country, Regional Asset Managers Views on Areas Where Consultants Are Involved, Key Institutions Alternative Allocations as a Percentage of Portfolio, Selected Asian Institutions External Managers for Alternative Investments, June Cerulli Asset Manager Survey Respondents Views on External Asset Manager Selection Criteria, Chapter 6: Being Successful in Asia 40. Top 10 Mutual Fund Managers Marketshare and Number of Managers Across Selected Asian Markets, Average Institutional Mandate Size in Asia ex-japan, Selected Mergers & Acquisitions in Asian Asset Management, 2013 July Asset Management Companies That Received Business Licences in Hong Kong Between 2009 and April The Cerulli Report Asian Business Strategies 2014

4 Index of Exhibits Appendix A.01. Summary of Key Deregulations at Asia ex-japan Institutions, A.02. Selected List of Fund Houses With Mandates from Asian Institutions A.03. Top 10 Asset Management Companies by Assets in China, India, and Korea, March The Cerulli Report Asian Business Strategies

5 Sample Section Asian Business Strategies: Making the Breakthrough

6 Sizing the Opportunities Chapter 1 EXHIBIT 4 Snapshot of Asset Management Industry in Taiwan, 2013 Source: Cerulli Associates Taiwanese Asset Management Industry Managed by onshore SITEs Managed by offshore managers Mutual funds US$57.2 billion Discretionary management US$33.2 billion Mutual funds US$90.8 billion Discretionary management Products not regulated by FSC State Pension mandates US$16.0 billion Other institutional mandates, HNW US$17.3 billion State pension mandates US$22.6 billion Other institutional mandates, HNW Largely attributed to affiliated managers for FHCs assets Sold onshore through appointed Master Agents (SITEs, SICEs) Sold onshore through overseas banking units (OBUs) (and potentially overseas securities units, or OSUs) Taiwanese regulators have in recent years been trying to level the playing field between onshore and offshore products as they attempt to grow the local funds industry. The result is a tighter rein on foreign managers and a loosening of rules on product development for onshore players. From January last year, managers can only submit one offshore fund for approval at a time, down from three and six in the past. Managers are also being assessed on their contribution to the local funds industry: Those that set up an office in Taiwan, hire and train more locals, and have investment teams in the country can enjoy perks that include being able to submit more offshore funds for approval and quicker fund approvals. Yet, there appears to be a loophole that offshore players can exploit private banks in Taiwan. In January this year, the Financial Supervisory Commission (FSC) allowed offshore banking units (OBUs) in Taiwan to sell wealth management products, including mutual funds, to their offshore client accounts. Essentially, foreign managers can put their funds on Taiwanese private banks shelves to be sold to OBU account holders. The funds need not be registered with or approved by the FSC, unlike current offshore funds sold to retail investors. So far, two mainland Chinese managers have capitalized on the change: China Asset Management is working with Citibank Taiwan to offer its RQFII exchange-traded fund (ETF) through the bank s OBU platform, while China Universal Asset Management is collaborating with Standard Chartered Bank to distribute its renminbi bond fund. It looks as though Taiwan is attempting to go the way of Hong Kong and Singapore (see below), but Cerulli believes the former is still some way off from being a private banking The Cerulli Report Asian Business Strategies

7 Company Index COMPANY INDEX Aberdeen Asset Management , 72, 83, 87, 95 AIA AllianceBernstein Aminvestment Services Amundi Asset Management , 80, 99 Amundi Hong Kong APS Asset Management Ashmore Investment Management Bank of China Bank of Yokohama Baring Asset Management BBL Asset Management Birla Sun Life BlackRock , 36, 51, 53, 74, 83, 84, 99 Blackstone BNP Paribas Investment Partners , 69, 70, 80 BNP Paribas Investment Partners Malaysia BNP Paribas Investment Partners Najmah Malaysia BNY Mellon BNY Mellon Western Fund Management BOCI-Prudential Asset Management Brandes Investment Partners Asia Cambridge Associates Chiba Bank China Asset Management , 34, 61, 76, 81 China Investment Corporation China Universal Asset Management , 76 CIMB-Principal Asset Management Citibank Taiwan Cititrust & Banking Corporation Cohen & Steers Capital Management Daiwa Asset Management , 47 Deutsche Asset Management , 61 Eastspring Investments , 72 Edelweiss Asset Management Fidelity Worldwide Investments , 60, 89, 99 Finansa Asset Management Franklin Templeton Asset Management , 53, 60, 67, 83, 87, 89, 99 The Cerulli Report Asian Business Strategies

8 Company Index Fullerton Fund Management , 95 Goldman Sachs Asset Management , 44, 84, 87 Harvest Fund Management , 61 HDFsset Management , 61, 67, 69 HSBC Indonesia HSBC Life ICBC Credit Suisse ICICI Prudential Asset Management , 61 Indiabulls Asset Management ING Investment Management INVESCO , 99 J.P. Morgan , 60, 74, 95, 96, 99 Jupiter Asset Management KAF Fund Management Kinki Osaka Bank Kokusai Krungthai Asset Management L&T Finance Holdings L&T Investment Management La Salle Land and House Fund Management LBN Advisers Lehman Brothers , 43, 56 Lilian Co Lujiazui International Trust M&G Investments , 95 Macquarie Group Manulife Asset Management , 81 Mercer Merrill Lynch MGPA , 83, 84 Mirae Asset Management Mitsubishi UFJ Asset Management , 47, 56 Morgan Stanley Investment Management , 44, 67 Morningstar Neuberger Berman , 40 NH-CA Nikko Asset Management , 40, 44, 56 Nomura Asset Management , 57, 87 Nomura Funds Research and Technologies , 87 Nomura Holdings The Cerulli Report Asian Business Strategies 2014

9 Company Index Nomura Research Institute , 43 Nonghyup OCBC Bank Okasan Asset Management One Asset Management Pelagos Capital Management Phatra Asset Management Philam Asset management Pictet Asset Management PIMCO , 51, 95 PIMCO Advisors Japan Power Corporation Principal Global Investors , 99 Prudential Plc PT Eastspring Investments Reliance Capital Russell Investments Sahara Asset Management Samsung Asset Management SBI Mutual Fund SCB Asset Management Schroder Investment Management , 60, 69, 70, 95, 99 Securities and Futures Commission Shanghai Jiu You Equity Investment Fund Management Shanghai Leadbank Asset Management Shanghai Lujiazui Financial Holding Co Shinhan Shinhan BNP Paribas Shinko Asset Shizuoka Bank Standard Chartered Bank Standard Life Investments State Street Global Advisors , 35, 51 Sumitomo Mitsui Asset Management SVG Advisers T. Rowe Price Thanachart Fund Management Threadneedle Investments TianHong Asset Management , 76 Towers Watson , 84 Treasury Asia The Cerulli Report Asian Business Strategies

10 Company Index Truston Asset Management UBS Hana UBS Wealth Management UOB Asset Management (Thailand) Vanguard Investments Hong Kong Western Asset Management Western Securities Zhongrong International Trust The Cerulli Report Asian Business Strategies 2014

The Cerulli Report Asset Management in Japan 2015

The Cerulli Report Asset Management in Japan 2015 Capturing Rising Foreign Interest NEW Interactive Data Supplement Overview & Methodology This joint report between Cerulli Associates and Nomura Research