Asset Management in Malaysia Industry Outlook 2021 and Beyond

Malaysia's asset management industry is poised for growth, driven by increasing demand for investment products and services. The industry's assets under management (AUM) are expected to reach RM1.4 trillion by 2025.

Malaysia's government has implemented policies to support the growth of the asset management industry, such as the introduction of the Islamic finance framework. This framework is expected to attract more foreign investment into the country.

The asset management industry in Malaysia is dominated by foreign players, with international firms holding a significant market share. The industry is also expected to see an increase in the number of local players, particularly those offering Shariah-compliant products.

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In August 2023, the SC introduced the Foreign Exempt Scheme (FES) framework to liberalise the fund management industry, providing high net worth entities and institutional investors with greater onshore access to foreign investment funds.

The revised Guidelines for the Offering, Marketing and Distribution of Foreign Funds (OMD Guidelines) now allow secondary listing of non-plain vanilla foreign exchange-traded funds (ETFs). This move aims to unlock the growth potential of ETFs in Malaysia.

The SC also expanded the Wholesale Fund Framework in 2023 to provide investors with access to a more varied range of alternative assets and strategies. Fund managers will be required to provide an offering document with information that facilitates comparability between funds.

Malaysian asset managers saw a significant increase in profits in 2021, with Public Mutual leading the pack.

Public Mutual's profit after tax rose 22% year-on-year to 765.45 million ringgit (US$173.37 million) in 2021, making it the largest private fund management firm in Malaysia.

Principal Asset Management came in second with 145.45 million ringgit of after-tax profit, though that was down 5.5% from 2020.

AHAM Capital, formerly Affin Hwang Asset Management, was third with after-tax profit up 25% to 104.52 million ringgit.

Kenanga Investors’ after-tax profit surged 235% to 30.71 million ringgit, three times faster than the 75% increase at runner-up Nomura Asset Management Malaysia.

Investors had a strong appetite for investing in funds, especially those focused on Asia and the US, due to the strong performance of these markets.

The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index shed 3.9% last year, but investors remained optimistic about the market's potential.

Some asset managers are anticipating a brighter outlook for 2023, with interest rates expected to stabilise and the US Federal Reserve likely to slow the pace of rate increases.

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Asset Management Malaysia has a growing industry, with assets under management (AUM) increasing from RM1.4 trillion in 2015 to RM2.4 trillion in 2020.

The industry's growth is driven by the country's stable economy and favorable regulatory environment.

Malaysia's asset management industry is supported by the Securities Commission Malaysia, which has implemented various initiatives to promote the development of the industry.

The SC's initiatives include the introduction of the Collective Investment Schemes (CIS) framework and the establishment of the Asset Management Association of Malaysia (AMAM).

AMAM has played a key role in promoting the industry and providing support to its members.

The industry's growth has also been driven by the increasing demand for investment products from high net worth individuals and institutional investors.

Malaysia's asset management industry has the potential to grow even further, with the country's economic outlook remaining positive.

Malaysia has a well-established asset management industry, with several key players that have made significant contributions to its growth.

The Employees Provident Fund (EPF) is one of the largest asset managers in Malaysia, managing over RM700 billion in assets.

Kumpulan Wang Persaraan (KWAP) is another major player, managing over RM100 billion in assets and providing retirement benefits to civil servants.

AIA Bhd is a leading life insurance company in Malaysia, with a strong presence in the asset management industry.

AmBank Group is a major banking group in Malaysia, offering a range of asset management services to its clients.

The Securities Commission Malaysia (SC) regulates the asset management industry in Malaysia, ensuring that all asset management companies adhere to strict guidelines and regulations.

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