DBS Asset Management aims to triple its assets under management from the current S$10.5 billion ($6.2 billion) over the next three-to-five years, says Lim Heong-Chye, managing director in Singapore.
The firm is the largest retail funds player in Singapore but remains a minnow against global competitors. Nonetheless it has tripled its AUM in the past three years on the strength of its expertise in global fixed income and Asian equities - and by rising market valuations.
Now the firm is keen to enhance its regional capability and start marketing its services directly to offshore clients.
This includes a joint venture in China, establishing an office in Tokyo and perhaps a presence in South Korea. Lim says negotiations with two potential partners in China have reached the final stages after nearly three years of exploration. DBS Asset Management has a joint venture in Malaysia, Hwang DBS, that has provided experience in creating such partnerships, Lim adds. The firm's biggest priority is to team up with an institution that can provide good relationships with large distribution banks.
Japan remains a tough market to enter, Lim concedes, but he says the firm is in talks about sub-advising other fund houses' Asian equities products. Korea is a more distant project, as the firm is looking for better incentives. It also intends to boost its staff in the Hong Kong office to boost its North Asia capabilities.
In addition to building its regional presence, DBS Asset Management is also trying to access global clients. It will launch a US dollar-denominated version of its successful Singapore dollar-denominated global fixed income fund, which now has around S$600 million under management, making it the largest single fund on offer in the Lion City. The US dollar-denominated version will be domiciled in Luxembourg and will be DBS Asset Management's first offshore open-ended mutual fund.
DBS Asset Management is also looking to offer an Asian money market fund, some Asia equity country funds and an Asian fixed-income fund. Lim wants to offer low-risk products to pension funds and other investors around the region that are just beginning to invest overseas.
The firm is in discussions with private banks, starting of course with DBS Private Bank and DBS Bank's regional network. Lim is also putting more resources into building the firm's performance record and talking with more investment consultants, not just in Asia but also Europe.
Lim is sanguine about the potential threat of Temasek, the Singapore government's holding company, entering the local asset management industry (the organization has recently announced plans to do so), despite the fact that Temasek is a major stakeholder in DBS Group. He concedes that whatever products Temasek offers to government-linked corporations will be attractive at first, but says the holding company will ultimately have to compete on performance, process and skilled fund management.
"To continue to grow, we must go regional and maintain our track record," Lim says. "We're growing very fast. People sense our investment professionals are young and energetic. Our staff has a sense of achievement here."