Asian institutions are increasingly turning to passive investment, according to Nicholas Hadow, Singapore-based director of business development at Aberdeen Asset Management Asia.
“Passive investment among Asian institutions is large and growing,” Mr Hadow said during a panel discussion at the recent FT Business of Asset Management conference in Hong Kong. He believes passive strategies will take a large share of the market, as active managers are faced with “capacity constraints”. He said Aberdeen had closed to segregated Asia mandates seven years ago and to emerging market mandates two years ago.
Capacity constraints derived from an identity issue on the active front, Mr Hadow said, noting that some self-proclaimed active managers that were unable to deliver outperformance “give the rest a bad name”.