Building BlackRock (BLK)'s local alternative investment capabilities in the Asia-Pacific region will be a top priority in the coming years, said Mark McCombe, a senior managing director and chairman of BlackRock's Asia-Pacific operations.
“I think Asian investors increasingly want Asian capabilities,” and building those capabilities is a key to BlackRock pursuing its role as a fiduciary on behalf of institutional and retail investors in the region, Mr. McCombe said.
In an Oct. 17 interview at the Skybridge Alternatives Conference in Singapore, where he participated in a panel discussion on Asian financial markets and the global economy, Mr. McCombe said BlackRock has made significant strides over the past year in establishing long-only equity and fixed-income investment capabilities in the region.
BlackRock brought in a new equity team in Hong Kong to manage Asian equities about a year ago and continues to build those operations, and nine months ago the company recruited a fixed-income team in Singapore that's “starting to get some momentum,” Mr. McCombe said.
Amid that progress, “the big hole that needs to be filled (is) a broad suite of alternative capabilities in the region, whether it's real estate, infrastructure, hedge funds or private equity, Mr. McCombe said.
BlackRock will be methodical about finding “the right opportunity, the right teams, the right business model that makes sense to us,” but three years from the company should be well on its way to fielding a “good, strong Asian capability,” Mr. McCombe said.
Mr. McCombe said BlackRock sees opportunities in Asia to grow its retail business as well as its institutional business, as big sovereign wealth funds in the region come to grips with the growing complexities of managing huge pools of money amid difficult market conditions.
For a firm with established risk management offerings like BlackRock, there will be growing opportunities as institutions in Asia increasingly think about not just what they're investing in, but “what sort of risks are you running, what's happening to (your) portfolio over time, and what are some of the issues you have to be aware of,” Mr. McCombe said.
Mr. McCombe said roughly 10% of BlackRock's $3.67 trillion in assets as of Sept. 30 comes from Asia-Pacific clients, with Japan and Australia leading the way.