These days, an asset-management company seems to be an essential part of the business structure of any commercial bank.

Asset managers support the operations of the parent bank, and vice versa. In fact, the larger the bank, the more likely it is to attract a large inflow of money to its mutual fund unit.

Almost all of Thailand's commercial banks have their own asset-management firms, including Bangkok Bank, Siam Commercial Bank, Kasikornbank, Krung Thai Bank, Thanachart Bank, United Overseas Bank (Thai), TMB Bank, Siam City Bank and BankThai. The Bank of Ayudhya has two asset management units.

In total, however, there are 18 asset-management companies, excluding two newcomers for which the Securities and Exchange Commission has just granted licences.

How do the independent firms - those without the support of a parent bank - run their businesses and maintain growth in a fiercely competitive industry?

Aberdeen Asset Management

This firm's equity fund performance is beyond question. Besides its outperformance, the company has received a number of industry awards, including Best Asset Manager in the recent Stock Exchange of Thailand Awards.

The key strategy that has lifted its name to the front row of equity investment masters is the "deep-in-detail" visits made to every company in which Aberdeen invests.

This strategy has been applied in every country where the company has set up business. In Thailand, its equity investment is currently diversified into 30 companies. Thanks to efficient in-house research, it has been able to take a profit when any stock it holds is over-valued and buy when stocks are under-valued. And, although that's easy to say, it's very hard to achieve with consistency.

Its equity fund managers also discuss prospective investments with their counterparts in Singapore and London, to obtain a global perspective, before making any decisions.

The London-based company first began business in Thailand four years ago, when it bought shares in the former Nakornthon Schroder asset-management company run by the Wanglee family.

Asset Plus Fund Management

This company, which began operations in 2004, is wholly owned by Asset Plus Securities. Therefore, most of its customers come from its parent securities firm, with belief in the acknowledged master of merger and acquisition, Kongkiat Opaswongkarn, Asset Plus Securities' chief executive.

The company has fixed-income, mixed and foreign investment funds like many others, but with a small marketing force, each of the funds is small when compared to similar funds run by other asset managers.

Therefore, sheer performance allows the company to survive in the market, with determination to achieve an absolute return for its private fund customers.

ING Funds (Thailand)

Before the company caught up with the trend by launching a series of short-term fixed income funds, ING's customers were mainly introduced by the Standard Chartered Bank, Citibank and the Hongkong and Shanghai Banking Corporation. Their average purchase of mutual fund units is Bt3 million per account.

Knowing that lack of bank support is an important constraint preventing its expansion, the Netherlands-based company plans to implement new technologies to support retail customers in the future.

Although it has not revealed details, it is believed the innovation will help ING Funds attract more individual investors.

MFC Asset Management

Despite having no bank support, MFC has worked its way up to become the country's third-largest asset manager in terms of net asset value.

It was founded by the government and the International Finance Corporation to become Thailand's first mutual-fund management company, and has links to many government projects. Even so, MFC refuses to rest on its laurels. It has always been a pacesetter in product innovation.

It is currently aiming to launch funds that invest in environmentally concerned companies and government infrastructure projects. Last year, it set up a Tsunami Fund to help the victims of the disaster recover and run their businesses again.

Besides its creative and socially concerned funds, MFC is also aiming to go international. The company wants to be one of the region's biggest players in five years and, after that, it will try to expand its business into China.

One Asset Management

Established in 1992, the company is 95.42-per-cent owned by KGI Securities (Thailand) and most of its customers are institutional investors.

It also manages some funds for government projects.

Even so, it is keen to claim its share of the retail market. Besides equity, fixed, mixed and foreign investment funds, One has also created a reputation in property funds.

Its former president, Wiwan Tharahirunchote, highlighted property funds before the rest of the industry caught on. Although she left to join Kasikorn Asset Management in February, One has held on to its property fund focus.

One also works hard to attract new retail customers. It recently launched what it calls its "automatic millionaire programme", aiming to help salaried workers to invest consistently.

It also conducts workshops in some companies, introducing the basics of fund investment.

Tisco Asset Management

Although the company has a banking unit, it was licensed by the central bank only last year, and the asset-management firm has had to generate its income without depending on introductions from the bank.

Before changing to become an asset manager, Tisco's core business was provident funds. Even though it's almost 15 years old, its mutual fund portfolio is now not as large as Tisco's private and provident funds.

As of May this year, its mutual-fund business took less than a 1 per cent share of the market, with assets worth Bt9.86 billion under management. Its private funds ranked second in the market with assets worth Bt22.19 billion under management while its provident fund was also ranked second with a 13.43 per cent market share and assets valued at Bt48.73 billion under management.

Tisco's parent, Tisco Bank, signed a new cooperative agreement in June this year with Mizuho Corporate Bank. The company aims to be one of the top choices for the fund-management business of Japanese firms.

Due to time constraints in preparing this article, we were unable to contact Finansa Asset Management, another fund manager without bank support, for its comments.

Piyarat Setthasiriphaiboon

The Nation