Taiwan Financial Giant Shifts Assets To Boost Asset Mgmt Arm

Bloomberg

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00:00It certainly sounds very promising, building this, you know, Taiwan has its silicon shield, to building this financial shield.

00:08It's promising, but what's the potential, do you think, of Taiwan becoming a regional hub?

00:13I think this is a very good project for Taiwan at this moment.

00:18Sorry.

00:19Because you know in Taiwan, the financial system somehow is very stable and very prudent.

00:26Somehow, regulation is very rigid.

00:30But this time, Financial Security Commission announced the asset management center project in Kaohsiung Financial Special Zone.

00:40We are very excited about this project because you can see Cassei Financial Holdings from the beginning.

00:48We utilize what we call dual engine strategy for the group structure.

00:51But we feel, suppose we can transfer to be a three engine structure, including banking, insurance, and the asset management.

01:00That should be very, very good.

01:01We will take this time to try to transfer the group structure.

01:08So we put a lot of effort to try to build the Cassei site as the asset management platform.

01:15So this time, the FSC not only encouraged a financial institution to develop private banking business, family office business,

01:25they also encouraged a life insurance company to move their assets and professionals to site.

01:31How much do you think it will grow in terms of AUM?

01:36What targets are you set now?

01:37So far, the Cassei site is even around $2 trillion.

01:40Supposed to plus around $6 to $8 trillion from Cassei Life and professional.

01:48Suddenly, the Cassei site would become a sizable site in the region.

01:53So we try to make Cassei site be stronger and bigger.

01:57And they are strong enough to manage the local international third-party assets.

02:03This is a very, very, very exciting moment for Cassei Financial Holdings.

02:07Yeah, it certainly has its potential, right?

02:10But also, Taiwan does have its sort of hurdles that it has to overcome.

02:16And for one thing, there's higher taxes here.

02:18There are capital controls around the Taiwan dollar.

02:21Also, there is geopolitical uncertainty with China as well.

02:25Do you think this project counteracts some of those challenges?

02:28Well, actually, for the tax, for the currency control, somehow there's this weakness for Taiwan.

02:35For the geopolitical price, somehow some investor will have concern.

02:42But I think this time the most important thing is the deregulation.

02:47So through the deregulation, you can see we have a lot of new business we can do.

02:52Those business actually we try to do, but we cannot do it even before.

02:55But this time, those deregulation would help a lot.

02:59You can see so many local and international business in Taiwan.

03:06They try to set up an operation in the Kaohsiung Special Zone.

03:10So suppose there's no attractiveness.

03:13Why so many financial institutions rush into the Kaohsiung Special Zone?

03:18So I think that you can imagine the government tried to develop the asset management center for more than 20 years.

03:26But we haven't achieved it, as you mentioned.

03:29Several issues we are still facing today.

03:33But I think this time, because the FSC is very proactive and also encouraged all the financial students to participate.

03:42And I think the Financial Supervisor Commission has earned the confidence and the admission from the financial institution in the public.

03:52And the regulators at the FSC has been urging, I guess, a lot of the life insurers to really put mandates into local asset managers, right?

04:04They're talking about, what, a trillion NTD really for the first year or so.

04:09I'm just wondering in terms of what Cathy's plans are.

04:12We're hearing chatter that the life insurance unit might be folded into your asset management arm.

04:18Can you confirm that with us?

04:19What's the strategy moving forward?

04:21Well, actually, in Taiwan, because the site is regulated very rigid.

04:29For example, in Taiwan, a financial holding company, our employees, actually, they can be an employee on the other subsidiary.

04:39But for the site, no way to do that.

04:44But this time, suppose they can deregulate.

04:47And then we can move all the professionals, several hundred people from Kasei Life to site.

04:53Actually, that will enable Kasei site capability very well.

04:57So I think this is the moment for Kasei Life and Kasei site.

05:04They can work together.

05:06So how much in terms of assets will Cathy be mandating eventually?

05:09So far, it's not a big number.

05:15But I think we will...

05:16What is that number?

05:17Can you give us a round number?

05:19I think it's around...

05:20Let me see.

05:22It's around...

05:24It's around $200 billion NT dollars a round.

05:29But we are grateful to ship all the other assets from Kasei Life to Kasei site.

05:34Okay.

05:35Does that actually do anything in terms of changing how much the foreign asset managers get?

05:39You know, did they...

05:41Does that chunk get moved around?

05:43And does it really actually boost AUM, this sort of move that you're seeing?

05:46I think this is not only boost the AUM.

05:48The most important thing is the professional and the mindset.

05:54Because for live instrument company, they are really good at long-term asset management.

06:00So, for example, Kasei Lab, they deliver very good performance for a very long term.

06:07So such capability, they move to Kasei site.

06:10That would be really, really helpful for them.

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