Purple Asset Management launches OCIO services

Singapore

SEEING "incredible" opportunities for outsourced chief investment officer (OCIO) services in Asia, Purple Asset Management has launched an OCIO service provider to get a slice of the regional market potentially worth US$1.8 trillion.

Purple Asset Management launched The Global CIO Office on Thursday in its bid to capitalise on growing presence of family offices and wealth businesses in Asia amid a backdrop of falling returns for most asset classes.

Gary Dugan, founder of The Global CIO Office, told The Business Times a day before the launch that he foresees the Asian OCIO market to be on a par with its US counterpart in terms of the value of assets managed.

The US OCIO market was worth about US$1.8 trillion in 2018, according to Mr Dugan, who is also the chief executive of Purple Asset Management and a veteran with 35 years of industry experience.

Mr Dugan shared that The Global CIO Office has been approached by some OCIO providers in the US "for us to be potentially their Asian angle".

The Global CIO Office provides a suite of customisable investment advisory services, including inputs relating to strategic and tactical asset allocation, multi-asset and single-asset class portfolios, fund selection, private debt, commercial and residential real estate, environmental, social and governance (ESG) portfolio management and product portfolio management.

OCIO provider Morgan Stanley Investment Management (MSIM) confirmed to The Business Times that it has seen higher demand for OCIO solutions in Asia. Jacques Chappuis, global head of distribution at MSIM, said: "We have seen increased engagement across institutions and high-net-worth individuals in Asia to build a strategic partnership around our customisation capabilities and investment solutions combined with our knowledge sharing and client education."

MSIM designs bespoke investment programmes for institutions and high-net-worth investors worldwide, and has been offering these solutions for over 30 years.

Johan Jooste, managing director of The Global CIO Office, explained the choice of Singapore as its base to reach out to the region and the Middle East. He said: "The new framework that the MAS (Monetary Authority of Singapore) and the Singapore government (are) putting in place for family offices is very conducive to their business and ours."

Mr Dugan observed that there is one particular opportunity for OCIO services in Singapore: there are a number of bankers who are breaking away from the big houses and setting up new multi-family offices.

In Asia, the imminent transfer of inherited wealth and increasing regulatory scrutiny have led to many families looking to institutionalise the administration and management of their assets. For instance, outsourcing operations is becoming a preferred option for asset managers in the Asia-Pacific as developing regulatory requirements and a low-yield environment add downward pressure to costs and revenues.

The Global CIO Office was billed by its executives as a cost-effective solution under the current investment environment.

"You can't charge clients two percentage points when the return from a bond is 2 per cent. You're wiping out their returns. And so with the industry much more mindful of costs going forward, we are very cost effective," Mr Dugan said.

"The company will provide the benefit of having a hub of experts which our clients can easily call upon for any time period required. The company will thereby enhance flexibility, significantly reducing the cost of a CIO function."

The Global CIO Office does not have the experts on its payroll but connects them to the clients when the demand arises.