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HSBC Asset Management

Q4 2020 Business Update

Message from our Chief Executive Officer


Nicolas Moreau
CEO, HSBC Asset Management

I am writing to you following the announcement of HSBC’s 2020 end of year results, to give you a more detailed update on HSBC Asset Management’s performance during this time.

It goes without saying that 2020 was a very different year and the external environment in the last year has been very challenging.

Despite this, I’m pleased to let you know that we have seen incredibly strong performance across our asset management business. Overall, we added over USD100bn of new assets in 2020. Our AUM stands at USD612bn as of 31 December 2020, up from USD516bn in 2019. A large part of this increase is from the net new money (USD 55bn) that we've received from you, our clients. As ever, we are grateful that you have chosen to trust us with your assets during these uncertain times.

A brief look back at 2020

It has been one year since we set out our strategy to re-position our business as a core solutions and specialist Emerging Markets, Asia & Alternatives focused asset manager, with client centricity, investment excellence and sustainable investing as key enablers.

Since then we’ve established a market competitive and client-centric operational model to deliver high quality services to our clients. We’ve enhanced our capabilities while expanding the range of instruments in which we invest to achieve investment excellence and innovation, and enabled a ‘multi-process strategy’ within investment platforms. This has allowed us to be more performance-focused and outcome-orientated.

These are only some examples of how we’ve changed as a business. There are so many more: whether that’s bringing in new hires, the launch of the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO), the launch of a truly innovative joint venture of HSBC Pollination Climate Asset Management - that aims to create institutional funds that will help clients invest in “natural capital” - or our focus in areas such as Alternative Solutions and Emerging Markets & Asia.

Looking ahead

We have strong momentum and are building a robust foundation to continue to meet the needs of our clients and grow our business in a sustainable way. We have some exciting plans for 2021, including accelerating domestic wealth growth in China through HSBC Jintrust and continuing work around our strategic sustainability ambitions. We’re expanding our ETF offering with product launches in fixed income and sustainable credit, increasing the number of external third party distributors in India and working on growing Liquidity product penetration in Asia Pacific. We launched our first direct loan fund in December 2020 and are following up with a high yield infrastructure debt fund this year.

Delivering investment excellence is central to our plans and will remain high on our agenda in 2021. The external hires we’ve made in the last year all come with outstanding performance track records and our higher conviction move has already led to strong performance, particularly in our flagship Luxembourg range.

Building a world-class asset management brand only happens through the hard work of our colleagues. This year we launched our internal People Initiative, bringing our people to the top of our agenda - and this will continue in 2021. The Diversity, Equity & Inclusion initiative is also top of our agenda to help us build a truly motivated, diverse, equitable and inclusive asset management workforce, proactively shaped to deliver our vision and strategy and to reflect the clients we want to serve and the societies in which we want to live. There is still work to be done in this area but our wins in the categories “Best gender representation” and “Regional leader – Asia” at the Citywire Gender Diversity Awards 2020 is evidence that we’re moving in the right direction.

Despite an unprecedented 2020, I’m pleased to be able to report that we have performed very well and can look towards 2021 with confidence. I, and my team, remain available for you and we look forward to being able to help you throughout the rest of this year and beyond.

Thank you for choosing HSBC Asset Management.


Highlights – Business performance and transformation

Financial

Total AUM (end of December 2020) USD 612bn

*Alternatives assets include USD4 billion from committed capital ('dry powder').
**Others refer to the assets of Hang Seng Bank, in which HSBC has a majority holding.
Source: HSBC Asset Management as at 31 December 2020. Any differences are due to rounding.


Our strategy

Our vision is to become a core solutions and specialist Emerging Markets, Asia and Alternatives focused asset manager with client centricity, investment excellence and sustainable investing being the key proponents of our strategy.

To help us achieve our strategy, we focus on eight strategic growth initiatives, as follows:

  1. Private Loans & Credit
  2. Direct investment capabilities in Alternatives – Private Equity and Infrastructure
  3. Liquidity
  4. Sustainable and Impact investing
  5. Solutions (particularly insurance)
  6. ETFs (particularly ESG, Fixed Income and Asia)
  7. Building a competitive fund range for our Wealth distribution channels
  8. China and India

This page is prepared for general information purposes only and does not have any regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. Any views and opinions expressed are subject to change without notice. This document does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment. References to 'we', 'us' and 'our' are references to HSBC Asset Management.