Only about a year after Bank of the Philippine Islands’ acquisition of the local trust operations of ING Bank, the trust business—now known as Odyssey Funds—has already breached the P100-billion mark in terms of assets under management (AUM).
The AUM level of Odyssey Funds has grown by about 27 percent to P102.2 billion as of the end of February from P80.5 billion at the time of BPI’s acquisition of this fund management business in March last year.
Odyssey Funds—which is targeting the “moderately aggressive” and “aggressive investors”—now accounts for about 14 percent of the total AUM of BPI’s asset management and trust group.
The increase in AUM is attributed to a combination of higher revaluation of assets and net increase in inflow from old and new clients, said Paul Joseph Garcia, BPI senior vice president and head of Odyssey Funds.
Consolidated AUM of the BPI’s asset management and trust group amounted to P668.84 billion as of end-2011, or about 24 percent of the total Philippine fund management industry. While Odyssey accounted for 14 percent, wealth management accounts comprised 40 percent of BPI’s AUM. Institutional accounts accounted for 24 percent while traditional trust accounts represent 22 percent.
The expansion in BPI’s asset management business reflected an increasing demand for better-yielding investment alternatives given the low interest rate environment.
In the case of BPI, total deposits declined by 5 percent last year as some clients veered away from time deposits in search of better yields.
In general, the Philippine asset management industry has grown at a compounded annual growth rate of 14.8 percent in the last seven years to end 2011 with P2.78 trillion in assets.
In the case of Odyssey Funds, Garcia said 45 percent of assets were invested in equity, an asset class that is widely expected to outperform fixed income this year. “Philippine investors are getting wiser. They have learned their lessons. When the stock market reaches a new all-time, sometimes you see some redemption and profit-taking by retail investors. But every time there’s a correction, you see buying,” Garcia said in an interview.
The performance of fixed income last year benefited Odyssey Funds. This year, it expects equities to perform well.