Eastspring Investments (Eastspring), the Asian asset management arm of UK-based insurer Prudential plc, is entering Thailand’s mutual fund market with the purchase of a 65% stake in Bangkok-based TMB Asset Management (TMBAM) from the latter’s parent company, TMB Bank Public Co Ltd (TMB), for an undisclosed sum.
TMBAM is Thailand’s fifth largest asset manager with assets under management (AUM) of 422 billion baht (US$12.70 billion) as at March 31, 2018.
Eastspring says it has an option to increase its ownership of TMBAM to 100% “in the future”.
According to the company, the acquisition “reinforces Prudential’s commitment to the Thai market”.
“It also complements Prudential’s fast growing life insurance business and provides Eastspring with a unique opportunity to establish a significant third party presence in the largest and fastest growing mutual fund market in Southeast Asia,” Eastspring says in a statement on July 25.
A spokesperson for Eastspring tells Asia Asset Management (AAM) that TMBAM’s Chief Executive Officer Somjin Sornpaisarn will continue to lead the business with the local management team.
The transaction is subject to Thai regulatory approval.
As part of the deal, Eastspring has also signed a distribution agreement with TMB, Thailand’s seventh largest bank by assets, to provide “best-in-class investment solutions to their customers”, a partnership that it says can boost the lender’s “strong record of asset growth”.
“These foundations provide an excellent position from which to capitalise on the attractive growth opportunities in Thailand’s mutual fund market,” according to Eastspring.
Khun Piti Tantakasem, chief executive officer of TMB, adds that the partnership with Eastspring will allow the lender to better serve the needs of its customers.
“Eastspring is an ideal partner to meet the growing investment needs of our customers by developing and offering local, regional and global investment solutions through its highly rated product offerings,” he says in the statement.
Prudential has operated in Thailand for more than 20 years through Prudential Life Assurance (Thailand) Public Company Limited, serving more than 1.5 million customers and managing over 90 billion baht of assets on their behalf as at December 31, 2017.
Nic Nicandrou, chief executive of Prudential Corporation Asia, says Asia is “the growth engine of Prudential” and that “the acceleration of our asset management business is a key strategic priority”.
“This acquisition (of the stake in TMBAM) further enhances Prudential’s position in Thailand and demonstrates our commitment to meeting the fast-growing savings and investment needs of our clients in the region,” Mr. Nicandrou says in the statement. “Through its on-the-ground presence, Eastspring will also be able to enhance its investment support to our high-quality life insurance business.”
Figures posted on the website of the Thailand Association of Investment Management Companies show that TMBAM’s mutual fund market share by assets dropped to 8.06% as at June 29, 2018, with AUM of 396.62 billion baht, from 8.63% at the end of 2017, when the AUM was 432.81 billion baht.
However, the decline was not confined to TMBAM. All but one of Thailand’s top five asset managers posted lower AUM in the first half of 2018 amid a weaker stock market.
According to a fund manager at a Bangkok-based asset management company, Eastspring “has what it takes to grow market share in Thailand”.
“The company can leverage on its wide range of regional and global products, as well as have the capability to develop localised products. This can be a real differentiator,” the fund manager tells AAM, speaking on condition of anonymity due to company policy.
Eastspring had total AUM of £139 billion (US$183.53 billion) at the end of 2017.
