Taiwan asset managers earned record income last year, with all but four posting annual gains.
Total net income of the 39 securities investment trust enterprises (SITEs) jumped 44.4% year-on-year to an all-time high of NT$12.6 billion (US$455 million) in 2021, according to a review of their results by Keystone Intelligence. Thirty-five of the 39 registered higher income than in 2020.
Operating revenue of the 39 SITEs grew 27.6% to NT$57.43 billion, while their operating expenses rose 23.5% to NT$42.26 billion. The share of revenue from fund management fees dropped to 70.2% from 74.8% in 2020.
SITEs are asset management companies that are set up to raise onshore funds. They can also be master agents for offshore fund brands.
Collectively, the 39 SITEs had 2,408 funds or mandates last year, comprising 995 onshore public funds, 717 offshore funds, 606 discretionary mandates, 75 private placement funds, and 15 futures trust funds.
Their total assets as of end-2021 was $372 billion, with onshore mutual funds accounting for 48%, offshore funds, 30.8%, and discretionary mandates, 20.4%. The balance came from onshore private funds and futures trust funds.
The SITEs generated NT$33.1 billion in management fees in 2021, up 12.5% from 2020. The majority of them – 429 or 43% – earned between NT$10 million and NT$50 million each, while 216 or 21.7% earned less than NT$5 million. Only 73 or 7% earned more than NT$100 million each.
Ten cash cows contributed the largest share of management fees of NT$5.09 billion, or 15.4% of the total. They include three fixed income funds, three equity funds, and one each of leveraged/inverse exchange-traded fund, general ETF, multi-asset fund, and fund of funds.
Allianz Global Investors Income and Growth Fund led with NT$826 million, followed by PineBridge Preferred Securities Income Fund with NT$758 million and Yuanta Daily Taiwan 50 Bear - 1X ETF with NT$600 million.
One of the most important assets for SITEs is talent. As of December 2021, the SITEs had 4,823 employees, 27 fewer than in 2020. The highest number of employees were at Fuh Hwa SITE, 387, Cathay SITE, 314, and Nomura SITE, 276.
*Donna Chen is with Taipei-based investment consulting firm Keystone Intelligence.