Asian institutional investors are poised to allocate more money to active quantitative strategies over the next three years, and money managers with local footprints in the region will have a leg up in winning that business, according to a study released Tuesday by BlackRock.
The study, commissioned by BlackRock but conducted by Greenwich Associates, involved phone interviews from November to December 2012, with 22 institutional investors apiece in Asia, including Japan and the U.S.
The study showed just less than a third of Asian investors currently allocate money to active quant strategies, well below the 82% of U.S. investors doing so.
The reported cited a relative lack of familiarity as one factor behind that gap, with none of the Asian investors surveyed claiming a strong understanding of quantitative models, vs. a third of U.S. respondents who said they do.
However, the survey responses point to greater scope for increasing quant allocations in Asia than in the U.S.
Just less than a third of the 32% of the Asian investor sample currently using active quant strategies, or 9% of the total sample, said they were looking to boost allocations to those strategies over the next three years.
Meanwhile, 13% of the 68% not currently using quant strategies — an additional 9% of the total — indicated they were likely to add quants to their portfolios over that time period.
For the 82% of the 22 U.S. investors currently allocating to quants, none said they were looking to boost exposure, while 11% said they were likely to decrease allocations over the next three years.
Of the 18% of U.S. investors not investing, however, a quarter, or 5% of the total, said they would add allocations to active quant strategies over that time period.
The Greenwich report concluded that “local support” — in the form of sales and client service capabilities in the region — “is a must” for money managers hoping to garner those quant allocations in Asia.
In an e-mail, BlackRock officials declined to say whether the Greenwich results matched the findings of the money manager’s own sales and client service executives in the region.
