Mystery mandate helps lift Manulife Financial AUM to record level

16 August 2017   Category: News, Asia, China, Global, Hong Kong, Japan, Korea, Malaysia, Singapore, Taiwan, Indonesia, Canada   By Liz Mak

Canada’s Manulife Asset Management (Manulife Asset) scored a big fixed income mandate in the second quarter, which helped its parent, insurance giant Manulife Financial Corp (Manulife Financial), achieve a record C$1.1 trillion (US$790 billion) in total assets under management and administration as at end-June.

But the identity of the investor is a mystery, and the company declines to disclose any details.

In its results announcement on August 10, Manulife Financial says its total assets at end-June were up 9% from a year ago, bolstered by net inflows and strong investment returns across its businesses in Canada, the US, and Asia.

It says the April-June period marks the “30th consecutive quarter of positive wealth and asset management net flows”, lifted by strong performances of the institutional teams under its asset management unit.

In particular, thanks to the sale of “a large fixed income mandate”, Manulife Asset says net institutional inflows in Canada surged 167% in the second quarter from the year-ago period, driving its AUM up by C$1.4 billion.

Citing client confidentiality, Manulife Asset’s spokeswoman in Hong Kong declines to identify the mystery investor behind the large mandate, the strategy involved, or even the portfolio manager responsible for the win.

But the company says the success was mirrored in the US, where institutional inflows were up 45%, adding another US$1.4 billion from sales in both public and private asset classes.

In Asia, “the institutional business pipeline remains strong and robust, following a solid second quarter bolstered by wins in Japan, Korea and Taiwan,” James Chen, senior managing director, head of institutional business and relationship management, Asia at Manulife Asset, tells Asia Asset Management.

“We will continue to leverage our wide array of public and private asset strategies and focus on establishing institutional partnerships in the region,” he says.

Although Manulife Financial still sends some C$480.2 billion, including its own funds from its insurance general account, to be managed by Manulife Asset, the asset manager reports it has seen better success sourcing more business from external institutional clients.

Manulife Asset’s AUM attributable to institutional investors at end-June was up 16% year-on-year to C$88.9 billion.

Manulife Financial’s Asian wealth and asset management businesses registered inflows of US$5 billion in the second quarter, 17% higher from a year ago.

The Asian business was weighed down by the performance of its money market funds in China, which suffered high redemptions in the second quarter.

But retirement-related flows in Hong Kong performed well with a 57% year-on-year gain in the second quarter, adding US$943 million to its local AUM, the company says.

Inflows in Asia, excluding Japan and Hong Kong, were up 58% year-on-year, or US$3.1 billion, bolstered by strong retail flows in Indonesia and Malaysia, and a new product launch in Singapore.