Insular Life, the largest Philippine-owned life insurance company, has awarded ING Investment Management a $25 million global equities mandate, about 5% of the insurer's total assets under management, says Chuak Chan, regional business development director at ING in Hong Kong.
Ramon Abejuela, executive vice president and COO at Insular in Manila says the move offshore had been in the works for over a year. "We had all our eggs in one basket," he says, noting all policy holder funds were invested in domestic equities or real estate. "We wanted just a little invested outside." The majority of its assets are managed in-house, as Insular has a good feel for the local markets, but it had to outsource for global expertise.
ING won a beauty contest involving nine other firms. The shortlist included American Express Asset Management and Credit Suisse Asset Management, as well as Citigroup Asset Management, which pitched a fund of funds.
Abejuela says Insular remains intrigued by the fund of funds concept, but decided to inaugurate international investment with a single manager. "It means the manager has a consistent philosophy and is easier to monitor. It gives us better control of our risk exposure," he comments. But should Insular decide to outsource another 5% of its assets, it may adopt a fund of funds strategy, to let it compare which is most effective.
Chuak says this is ING's first discretionary global equities mandate from the Philippines, although the firm already has some offshore mandates in CCALF structures. ING is hoping to win similar mandates from other local insurance companies, but Chuak says it is a long, laborious process, and that often potential clients have small portfolio sizes.
The mandate was in fact won earlier this year but only now has Insular funded it. The delay was due to the insurer's need to get approvals from the central bank and insurance authority.