LISTED company ATR KimEng Financial Corp. (ATRKE Financial) is expanding its presence in the fast-growing domestic asset management industry, starting with the formation of a dedicated business group called ATR KimEng Asset Management Group to be headed by former ING Investment Management regional general manager Michael V. Ferrer.
In a disclosure to the Philippine Stock Exchange, ATRKE Financial reported that subsidiary ATR KimEng Capital Partners Inc. (ATRKE Capital) will reorganize its asset management businesses into the Asset Management Group and increase the capital of the these businesses to fund this new initiative.
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ATRKE Capital currently has a presence in the asset management industry that it conducts through its subsidiary The Mutual Fund Management Company of the Philippines (MFMCP), which manages three mutual funds through its trust department.
On a combined basis, the whole ATR KimEng Group manages and administers over P5 billion in Assets Under Management (AUM) consisting of mutual funds, trust assets, insurance portfolios, and real estate for proprietary and third party clients.
As part of the plan, ATR KimEng Direct Investments, a subsidiary of ATRKE Capital, will be renamed ATR KimEng Asset Management Holdings Inc. and its authorized capital increased to P140 million.
Sale
MFMCP will be renamed ATR KimEng Asset Advisors (ATRKE Asset Advisors) and its authorized capital will be increased to P100 million. ATRKE Capital will concurrently sell its 83-percent stake in MFMCP to ATRKE Direct Investments, which will be the entity that will subscribe to new shares in the new ATRKE Asset Advisors.
In an interview, ATR KimEng Group president and chief executive officer (CEO) Manuel N. Tor-desillas said “ATR KimEng’s expansion of its asset management business is an integral part of our strategy of building a leading position in the capital markets, and brings synergies with our insurance and real estate businesses.”
“We believe that this is an opportune time to build capabilities in asset management while other players are retreating. As an independent asset management firm, ATR KimEng Asset Advisors is uniquely positioned to deliver high quality investment solutions to institutional and individual clients through multiple distribution channels,” he added.
To head this new initiative, ATR KimEng has tapped Ferrer, an experienced investment management professional, as its management partner. Ferrer has more than 20 years experience in asset management, most recently as the regional general manager for ING Investment Management based in Hong Kong where he was responsible for ING’s asset management businesses in Malaysia, Thailand, Singapore, the Philippines, India and the Middle East (Dubai).
Asset classes
Phillip Hagedorn, president and CEO of MFMCP, will continue to play an active role in ATRKE Asset Advisors as investment director and will oversee the domestic equities portfolios.
The investment team will also be expanded to include experienced portfolio managers to cover a wide range of asset classes.
“Despite the onset of the global financial crisis last year, the asset management industry has continued to grow at a healthy pace driven primarily by increasing affluence and wealth creation,” said Ferrer.
The trust industry’s AUM has grown by 15.4 percent to P1.5 trillion in the first quarter of 2009, while mutual funds have grown to P61 billion in AUM over the same period.
Underpinning the growth in AUM are the economy’s sound macroeconomic fundamentals, increasing gross domestic product per capita and savings rates, favorable demographic trends and a supportive regulatory environment.
Ferrer explained, however, that the penetration of mutual funds to household savings in the country is still one of the lowest in the world, and the industry’s AUM of approximately $20 billion is small compared to its peers in Asia.
The existing range of products available to local investors likewise remains limited.
“ATR KimEng aims to capitalize on these opportunities by developing innovative investment solutions and products that will—in the future—allow clients to invest across a wide range of asset clas-ses,” said Ferrer. These include equities, fixed income, currencies and alternatives, such as real estate, private equity and commodities.
“This will ensure that clients are able to capture emerging opportunities in the global markets and build well-diversified portfolios. ATR KimEng’s asset management business will adopt globally accepted investment standards, processes and best practices, while employing sophisticated investment strategies and risk management techniques designed to deliver superior risk-adjusted returns,” he said. (PR)
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