HSBC's asset management arm is looking at smaller emerging markets like Malaysia and Indonesia as part of its strategy to ramp up its business in the sector with new funds and extensive hires planned for the coming year.
John Flint, chief executive of HSBC Global Asset Management, which has $411 billion under management, said he planned to hire some 50-60 people to support growth of emerging markets (EM) products.
Over the next 12 months HSBC GAM will be seeking investment managers, analysts, sales and marketing, and client support staff, he said.
The initial focus in Malaysia would be a suite of sharia investment products, compliant with Islamic law, for retail clients.
"We are still doing the feasibility study on that but we are looking at the standard menu of equity, fixed income and money market funds," he told Reuters. If this goes ahead the fund arm will need to open an office locally, he added.
Flint, who took over as CEO in January after predecessor Mark McCombe moved to Hong Kong to head the bank there, said his approach to building the business was driven by the bank's footprint.
"We're not going to pick an emerging market where the group isn't because we have no distribution network or brand value in that country."
Outside of key markets India, China and Brazil, he cited Indonesia as another opportunity, where the fund arm would work with the CEO of HSBC bank there to determine what sort of products could be developed.
Flint is also following HSBC's discussions with Old Mutual for its Nedbank stake with interest, as this would create an opportunity to develop an investment range for Nedbank clients in South Africa.
He said that the majority of the new funds to be launched over the next year would be emerging markets-focused, to fill out the range: "We have some good single country products for China, India and Brazil but we could add a few dimensions to the emerging market debt product, for example."
The new hires will come both in London, New York and Paris and in high growth emerging markets as HSBC GAM seeks to win business both locally and globally, particularly through targeting US institutional business, he said.
To beef up the US business, Flint plans to add a handful more sales people, both those with established institutional relationships and those who know how to access wholesale distribution platforms.
HSBC GAM now has some $93 billion in emerging market assets under management - just under a quarter of the total - but Flint did not rule out acquiring a boutique emerging markets shop or a bringing in a specialist team to augment the business.