Home / AXA’s active arm to set up Asian funds capability

(Pictured: Mark Tinker)

AXA Framlington, the active management arm of AXA Investment Management, is building a team in Hong Kong to enable Asian equity funds to be run locally, from around the end of this year.

Mark Tinker, who moved from London to Hong Kong with AXA in September 2013, said last week that Asia represented a “huge opportunity” for the firm, which is the sister manager of quant-oriented AXA Rosenberg. Both come under the AXA IM umbrella for distribution purposes.

“I’ve been building the business in Hong Kong, as a distribution business at the moment,” Tinker said, although he is an economist and former money manager himself. “We’re in the process of bringing out more resources from London and will be looking later in the year to have active equity funds run out of Asia.”

Tinker was in Australia primarily to speak at an economists’ breakfast produced by Rainmaker Information. He had spent 20 years as a sell-side economist and strategist prior to joining AXA Framlington in 2006, shortly after the privately owned Framlington was acquired by AXA. He was initially employed to manage the firm’s global active equities.

He is reasonably bullish on China, which he says is transitioning to a consumption-led economy, and is a fan of the recent liberalisation changes designed to open financial and other markets up to the world and competitive practices.

“I think the biggest risk to China is civil unrest,” he says. “But cracking down on corruption {with some high-profile cases late last year] is good for social harmony and also for changing the way they run the economy.”

Tinker says that China started building up its financial infrastructure from about 2009, after the global financial crisis had impacted heavily on the big global banks.

“Economic management is now more about consumers, services and efficiency,” he says. “So, China is becoming more like the US in terms of its drivers for growth.”

Notwithstanding its strong foreign exchange position, China still wants foreign capital, he says, which is long-term investment. This is behind the recent initiative, the Shanghai-Hong Kong Connect, or “through train” – which allows foreign money to more easily be invested via Hong Kong-domiciled funds and Chinese money to be invested offshore the same way.

“Hong Kong is where the rest of the country meets the world,” Tinker says.

He sees a time when China will have an array of new investment products and strategies for foreigners, such as municipal bonds which enable the securitisation of regional government debt.

“I believe that within five years, those types of assets will be in Australian investors’ portfolios,” he says.

AXA Framlington manages A$80 billion of AXA IM’s A$876 billion under management globally, two thirds of which is insurance-related statutory funds from within the group.