In part one of a two-part interview, Carol Wong (pictured) managing director for Asia Pacific at Old Mutual Global Investors (OMGI), the London-based asset management arm of Old Mutual Wealth, talks to SRP about the structured products market in Asia.

"There are lots of asset and wealth management companies already here and many new ones are also looking to enter the market," she said. However, according to Wong, the market in Asia cannot be considered a single unit, since there are marked differences among the separate countries. "For example, the pace of the fund industry development in Hong Kong is very different from the one in China," said Wong. "Additionally, even in Southeast Asia, the pace of development in Malaysia and people's perception in terms of funds are quite different compared to Singapore, for instance, which is a more developed country in that sense."

Furthermore, the level of education with regard to fund investments is not the same in the various countries, according to Wong. "What is more, product differentiation also creates discrepancies among the regions in Asia, because there is so much competition already, so it is a challenge differentiating ourselves," she said. "People want to find a product that can meet their risk and return requirements and, given so many choices, we work hard to differentiate ourselves through our product offering."

Regulation is another aspect that influences, both positively and negatively, according to Wong. "On the one hand, regulation sets up a good and disciplined playing field for all participants," she said. "However, on the other hand, regulation puts some restrictions in terms of marketing and selling activities, and often increases the cost as a result."

The demand for structured products in Asia is high, especially in China, where the market is increasing in size as investors want their capital guaranteed and they "can only achieve that through structured products", said Wong. "As a result, over the past 12 months, there is a lot of demand from China and Hong Kong," said Wong.

"We have signed up the majority of the global private banks in the region already and we have received good inflows from Taiwan, both from retail as well as institutional investors. We are also having clients starting to invest from Thailand and Korea for the past year," she said. "Given we are on track already in Hong Kong, Singapore and Taiwan, we are looking also to expand into other countries such as China and Malaysia in the coming future."

The company was known in Asia as Scandia Investment Funds, but decided, about five years ago, to merge that entity with the UK arm of Old Mutual Asset Management, and then created OMGI, according to Wong. "In the UK, the company is currently managing over US$55.3bn (as of September 30, 2017) across a range of different asset classes," said Wong "Globally, we have over 290 industry professionals, including a team of 60+ investment professionals."

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