Wells Fargo Bank has, um, Wells Fargo-sized ambitions for its Asian asset management business. The US banking giant has a market cap of $82 billion, making it the third-largest financial institution in the US and number four in the world. It is a huge money manager back home, with a $114 billion global institutional business, assets of over $140 billion in its private banking business, and another $95 billion under management in its US mutual funds operation.
Early this year it formalized its asset management business in Hong Kong and is in the process of both advancing its name as an institutional player, as well as seeking wholesale partnerships with financial institutions in Asia for its high-net worth money management operation, says Ignatius Choong, managing director of Asia investment management.
It already has such relationships with banks, securities companies and fund managers in Japan, for which it manufactures product. "We become the secret ingredient to wealth management providers," Choong says, declining to name the firm's partners there. He is now in discussions in Hong Kong and Taiwan, where Wells Fargo Bank has a track record; the firm has been in Asia since 1969. The firm is talking primarily with companies with which the bank has an existing correspondent or commercial banking relationship.
The firm is also open to regional acquisitions, should it find a local fund manager or other financial institution with a product or asset class expertise that complements Wells Fargo's existing capabilities, Choong says. "It's customer-driven," he says, noting the firm wouldn't acquire a new investment style if it didn't already have demand for it. He says there are gaps in the product range the firm is trying to address, but declined to get specific.
He is also on the constant lookout to hire people to add to his business development team, which now numbers four.
Choong explains the bank has decided to build up its asset management business here now that the regional market for mutual funds, wealth management and institutional money has grown. There is also a growing awareness among investors here of the need to diversify, and Wells Fargo believes its broad range of products will have something to offer, particularly in areas such as US fixed income and high yield.
The firm's strengths, he argues, include its independence (it doesn't have an investment banking affiliate), and a 150-year track record of customer service that dates back to the organization's stagecoach roots in the American West.
Wells Fargo leverages its client service teams in San Francisco for Asian clients. It has dedicated people in California who already work during Japanese trading hours, for example.
Choong says the mutual fund business is important as well, but is likely to be built off the back of partnerships established to handle institutional or high-net worth business, if it fits. For now Wells Fargo-labeled funds are only available in the US (it is America's 26th largest mutual fund company) although it does sub-advise in Canada, Germany and Japan.