Asset service providers enjoy a boom year despite market downturn

Asset service providers who gained from opportunities in Asia, especially in China, and restructured to meet client requirements emerged as winners of The Asset Triple A Asset Servicing Awards 2019

While the market downturn in 2018 hit their clients - the asset owners and fund managers - hard, asset service providers enjoyed a boom year that saw most of the major players achieve double-digit returns.

This is not to say that the asset service providers had an easy time in a year when almost all asset classes performed poorly. In fact, all asset service providers had to work very hard in order to meet the increasingly sophisticated requirements of their clients who were besieged by market uncertainty and volatility arising from the trade war, monetary tightening, and credit risks.

In this kind of market, vetting the winners and nominees for The Asset Servicing Awards 2019 was an extremely challenging exercise. 

Each asset service provider had their own strategy for how to service clients in such a difficult market environment but there are themes that they have in common.

First, Asia remains a high-growth market that provides huge opportunities for the asset service providers in terms of new mandates. While there were some mandates that were lost to competitors, all of the asset service providers also won new mandates in the form of either new businesses or takeaways from competitors. There were mandates in global custody, subcustody, domestic custody, and corporate trust, to name a few categories.

In China alone, the new market access schemes such as Bond Connect, Stock Connect, and CIBM Direct provided opportunities for asset service providers servicing fund managers seeking to access this huge market.

Changing market conditions and regulations in markets like Japan and India also provided new opportunities for asset service providers which were already positioned in these markets.

Second, the asset service providers have been restructuring themselves in terms of organization and coverage, as well as a suite of products and services, in response to the changing requirements of their clients.

Some have set up joint ventures particularly in China, some have restructured their organizational setup, and some have reorganized their servicing platforms. While the form in which these reorganizations have taken differ from one service provider to another, one key common theme is that they revolve around the type of client and the specific services which each client type requires.

Senior executives with extensive experience have also been brought in and relocated to Asia in order to strengthen the existing talent pool as well as provide new perspectives and insights for business development in highly dynamic markets.

Third, asset service providers are building their capabilities in areas where they seek to generate new business growth. The manner in which this is taking place is also unique for each asset service provider. For example, some service providers are strengthening their subcustody franchise by expanding to new geographic markets. Others are strengthening their global custody capabilities, particularly in the US and European markets.

In the broker dealer space, asset service providers are expanding their capabilities, especially in China and Japan.

It remains to be seen whether the same growth momentum can be sustained in 2019, however, even if only half of the growth posted in 2018 can be achieved in 2019, chances are it will still be a good year.

It is in this context that The Asset announces the partial list of winners of The Asset Triple A Asset Servicing Awards 2019. The winners for the award categories with nominees will be announced on June 27 in a gala dinner at the Four Seasons, Hong Kong.

Please click here for the full list of winners and nominees:

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Date

27 May 2019

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