HSBC's hunger for assets
Born out of a bloody cull, shaped by a succession of departures, HSBC Asset Management has led a tortured existence. While competitors have grown through acquisitions HSBC has been reinventing its business. The result? It's lagging behind the market leaders in both size and performance. Is now the time to buy? Andrew Capon and Julian Marshall report.
A curious thing happened in the sleepy English market town of Melksham, Wiltshire, last summer. The beautiful surroundings of the west country provided the backdrop to a decision by a small group of people which could yet have wide repercussions for one of the world's largest banks.
On a sunny day in August, the trustees of a new pension fund, Cooper Avon Tyres, were deciding who to ask to handle their £75 million ($120 million) of assets. The fund is not large, but for present and future employees such a decision is always important.
Having taken the advice of their consultant, Lane Clark & Peacock, they decided to appoint two managers and give them half each to manage on a balanced basis. The first name was an obvious one: Fidelity. The world's largest fund manager has a global reputation for investment excellence. The second name was more surprising: HSBC Asset Management.
While HSBC has transformed itself from the bank that financed Hong Kong's phenomenal success, into a pan-Asian force and latterly into a truly global power its asset-management business remains severely under strength. Says one close follower of the business: "It ought to be up there challenging the likes of Capital Group.