Sustainability and responsible investment drives growth in Thailand’s asset management sector

Thailand’s asset management industry, particularly private funds or segregated mandates, has grown by as much as 15.03 percent (CAGR) due to interest from insurers over the past 10 years, compared to 10.37 percent for the asset management industry as a whole, as of the end of December 2019, according to AIMC. As a result of persistent low interest rates and volatility in equity markets, there is a growing demand from clients – both institutional and HNWIs – for more customised solutions across different levels of risk and return. Additionally, investors may change their mandate as market sentiment shifts, in order to dynamically rebalance their portfolios in a fluid and evolving environment.

 

Robust and significant growth
Serving both institutional and HNWI investors, I’m proud to say our private fund business in Thailand has enjoyed significant growth of 37 percent (CAGR) over the past two years, according to AIMC. Within the institutional segment, our clients include private and publicly listed companies across a broad range of industries, endowments and foundations, as well as insurers and family offices. We have also been entrusted with one of our largest local equity mandates from a pension fund client. With specific investment guidelines of a Saving and Credit Co-operative, our PM team has developed the skills and expertise to help our clients achieve their long-term objectives. These efforts have seen us become the savings co-op fund manager of choice for many investors.

The increasing interest in foreign assets is a trend we have identified. With this in mind, we have been actively recommending that our clients diversify their investments abroad. The benefits of expanding investments into global markets are many – lower volatility, greater diversification and the lower risk concentration in a basket of asset classes are just a few examples.

We are lucky to have attracted a diverse, and constantly growing, client-list. To meet the unique requirements of each client’s investment needs, our team takes pride in crafting tailor-made solutions. The cookie cutter or ‘one-size-fits-all’ approach has never been part of our vocabulary. UOB Asset Management (UOBAM) has a long history of partnering and working closely with our clients to help them ride out market cycles.

Starting from the lower end of the risk spectrum, fixed-income instruments have the potential to generate income, mitigate downside risk and diversify a portfolio. For multi-assets, we offer a broad range of investment options, including income and life cycle. For longer time horizons, we focus on equity, expecting higher returns for those able to tolerate the possibility of capital loss.

Then there are alternatives that provide exposure to both inflation-sensitive assets and private investments. Being receptive to changes in the market and the shifting needs of our clients, we encourage a constant dialogue. Client feedback is invaluable to us. Having taken on board feedback from our corporate clients – relating to controls and operational risk prevention in performing online transactions – we have developed a dual-approval process with OTP notification for all our solutions.

 

Sustainability and investing responsibly
At UOBAM, we recognise that the investment community can play a pivotal role in the stewardship of social responsibility, thereby driving sustainability globally. In early 2020, we became an official signatory of the UN Supported Principles for Responsible Investment (PRI). Our twin pillars of sustainability are responsible investments (investment related) and corporate sustainability stewardship (non-investment related). When investing for profit and purpose, we believe that responsible investment can contribute significantly to the development of a more sustainable financial system – which in turn benefits the wider community.

Integrating ESG evaluation into our investment process across asset classes has enabled us to identify high-quality companies. We implement a stewardship policy: active ownership means actively engaging with a company, including through proxy voting related activities. These activities form a key component of our responsible investment approach that fulfils UOBAM’s fiduciary duty as an investment manager, to act in the best long-term interests of our clients.

We have also put in place a series of internal staff education plans, involving webinars and staff-led sustainability education workshops. These have been developed to improve awareness and knowledge of key sustainability issues pertinent to UOBAM (Thailand), which is one of the first asset management companies in Thailand to follow the PRI’s guidelines with the integration of ESG factors into our investment processes, after UOBAM became a signatory to the UN-supported PRI in January 2020. We capitalised on this fact by offering UTHAI-CG for Thai equity and UESG with Robeco as a sub-manager for global equity investment solutions.

Shaping a better world for future generations, we are championing a culture of sustainability internally. UOBAM will primarily support the following United Nations Sustainable Development Goals: zero hunger, good health and wellbeing, industry, innovation and infrastructure, sustainable cities and communities, responsible consumption and production, and climate action.

 

Exceptional services offline and online
UOBAM’s strategic pillars are built on solid foundations. We always keep customers front and centre, while staying digitally engaged and enabled. Not only do we strive to provide best-in-class investment solutions and performances, we also provide a level of customer service and experience that often far surpasses our clients’ expectations.

Our targeted marketing strategy means that we are able to create personalised messages for individual investors based on their requirements

UOBAM (Thailand) partners closely with UOBAM and the regional network to drive forward the adoption of new technologies, innovation and best practices, allowing us to leverage scale and efficiency. Keenly embracing technology, and harnessing digital innovation across our organisation, we have developed an award-winning wealth management platform known as UOBAM Invest. This state-of-the-art invention provides a robo-advisory service via a mobile application, allowing investors to monitor and manage their portfolio 24/7. The innovation is being improved continuously, enabling investors to plan and achieve their investment outcomes in the most user-friendly way possible. We have also been hard at work enhancing our digital services elsewhere.

For instance, we have added QR codes for easier transaction payments and enabled online opening of accounts on both our website and UOBAM Invest platforms – allowing investors to open accounts with us easily and with greater speed and efficiency. Agility is our forte, and we are constantly developing our offer to provide personalised services.

To better understand investors’ behaviour, we have conducted research on customer journeys. Analysing these findings helps us refine marketing tools and materials, including advertising campaigns. Our targeted marketing strategy means that we are able to create personalised messages for individual investors based on their requirements – all put in place with the objective of building seamless customer experience and increasing long-term customer loyalty; and naturally, conversions in their investment journeys.

 

Targeted COVID-19 support
During challenging times, safeguarding our clients’ investments is a top priority that forms part of our fiduciary duty. At UOBAM (Thailand), we are committed to providing investment management services essential to maintaining confidence in the financial system, reducing risk for our clients. Thanks to our technological capabilities, we have been able to continue delivering products and services without interruption during the COVID-19 pandemic.

The crisis has spurred us on, not only to be more disciplined, but also to exercise greater creativity and clarity in our communications, both internally and externally. Just like elsewhere in the market, the economic slowdown has impacted our clients’ liquidity and working capital needs, with some investors needing to increase their levels of cash on-hand. We have been able to provide this via our money market funds that focus on preserving capital and providing liquidity by investing in short-dated, high-quality corporate bonds, government securities and bank deposits. This liquidity solution is popular as it provides enhanced returns over that of short-term deposit rates. In essence, it serves as a short-term investment vehicle while waiting for the next investment opportunity.

 

Tackling unforeseen challenges
The coronavirus has thrown a wrench into the works for many financial institutions, requiring them to transition rapidly to new modes of operation in order to fulfil their fiduciary duties, while keeping customers and employees safe. Backed by almost three decades of experience and the many lessons learnt, we have been able to respond swiftly to evolving situations and continue to serve our valued clients. Our mantra during this challenging period has centred on ‘staying safe, staying effective, and staying committed.’

These three measures underpin everything we do to continue providing timely and ongoing support to our investors. To give a tangible example of how we have ensured business continuity while adhering to safe distancing guidelines and stringent disinfectant procedures, we have implemented work-from-home arrangements for over 80 percent of our staff. This transition has run smoothly thanks to our technological capabilities, which ensure that we are able to continue to offer products and uninterrupted services. Of equal importance, we have maintained our service levels by increasing the use of digital channels to deliver timely market updates, investment insights and ensured that our relationship managers are available to assist with client queries.

And naturally, we are keeping a close eye on clients’ investments, ensuring that there has been no disruption to the daily investment meetings, as well as the ability of the risk and performance measurement team to monitor clients’ investment exposures and portfolio movements, raising alarms when required. Another key part of our repertoire is to help clients navigate this challenging financial environment. To this end, we will continue to harness our nearly 30 years of experience as an investment management company, tapping into the expertise of our teams of investment counterparts and partners across the region, and guided by our established investment philosophy.