Gambling does not appeal to Rahul Chadha, but the chief investment officer of Korea’s largest international fund business is willing to wager on Asia’s booming casinos.
The Delhi-born fund manager has taken to strolling around the increasingly luxurious gambling dens of Macau[1] , China’s answer to Las Vegas, looking for establishments with the highest minimum bet thresholds.
“Macau’s gambling market is nearly eight times [that of] Las Vegas; that’s because the Chinese love to gamble,” he says.
But Mr Chadha, who made his first investment in the stock market aged just 13, is there to observe, and avoids being sucked in. “I’m not a big gambler, I just watch people playing,” he says.
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A keen observer of consumer habits, Mr Chadha is compulsive about noting which products and brands are hot among friends, family and colleagues, as well as where they are positioned in stores.
“Whenever I am travelling, I have this habit of looking at ladies’ handbags,” he confesses, explaining that airports are a great place to keep tabs on the brands that are doing well.
He enthusiastically pulls out his iPad to show photos he has taken of supermarket aisles or duty-free shops in airports as proof of his relentless hunt for tell-tale signs of which Asian companies are prospering.
Every detail counts, he says. His children’s recent request for Choco Pies, a snack produced by Orion[2] , a South Korean confectionery company, but increasingly distributed across Asia, has reinforced his growing conviction in the company.
“I think the whole consumption theme is about touch and feel,” he says. “We can all talk about [companies] sitting in our offices, but until you get a real feel on [a brand] and see consumers really liking it, this has no meaning.”
He believes the money rolling into Macau from the millions of Chinese tourists flocking there every year is symptomatic of broader consumer trends across Asia[3] , as demand for luxury travel, goods, food and cosmetics continues to rise.
“Chinese consumers travelling and buying luxury goods is something US consumers were doing in the fifties, and Japanese consumers were doing in the seventies,” he says. Now other Asian consumers, including those in the Philippines, Thailand and Vietnam, are catching up.
Mr Chadha, who manages a team of 15 investment professionals based in Hong Kong, Mirae’s largest hub outside Korea, has recently joined the travel-hungry hordes of Asian consumers as part of a mission to convince European investors about the merits of Asia-focused funds.
We meet in Mirae’s rather bland London office, where Mr Chadha is spending only a few hours before embarking on a whistle-stop tour of the Nordic region. He hopes a forthcoming European marketing push will help Mirae bring its $1bn of international assets under management in line with the $5bn it runs out of Hong Kong.
The CIO believes there are “massive opportunities” to distribute the fund’s Luxembourg-domiciled Sicav of 13 funds across Asia, particularly within private banking and wealth management in Hong Kong and Singapore.
As part of Mirae’s international growth plans, it plans to hire staff to target investors in the Middle East, and to increase the number of London-based employees in order to “sell much harder into Europe”, Mr Chadha says.
He admits that now is a tricky time to be persuading international investors to increase exposure to Asia[4] , given widespread concern about the impact of the US Federal Reserve’s tapering of its bond-buying programme on emerging markets[5] .
But he dismisses these fears as too short term. “I’ve had 14 years on the buyside in Asia, and what I’ve learnt is it pays to be grounded in emerging markets,” he says.
“If you want to make real money in the region, you smile when people get too bullish, and you smile when people get too bearish, because the world never comes to an end.”
It was the opportunity to work abroad that first drew Mr Chadha away from his role as an Indian equity analyst at Aviva Investors in Mumbai. He started as a Singapore-based analyst for Mirae seven years ago.
Mirae appealed as it is a “big name” in Asia, he says, accounting for roughly 35 per cent of the Korean asset management industry.
One of the early challenges of joining the company was adapting to how business is done at its headquarters in Seoul. “You would not see many juniors speaking a word against their bosses,” Mr Chadha says.
His influence, as part of an influx of foreign employees from China, India, Singapore and across Asia to help shake things up at the company, has helped foster a more questioning culture, he says.
He believes Mirae’s strong understanding of local market dynamics is what differentiates it from European-based rivals with emerging market expertise.
He says: “We have names in our portfolio that have almost doubled in the past 12 months, and now a lot of the big fund houses outside of Asia are warming up to them. We just smile at them and say, ‘But we were always there’.”
Some of his favourite stocks at the moment relate to the travel and tourism theme, such as the Minor International[6] hotel chain, which owns a number of resorts across Asia; Galaxy Entertainment[7] , one of Macau’s biggest casinos; and Samsonite[8] , the luggage brand.
He feels strongly about the casino theme, pointing out that in some – particularly those with an oriental feel, rather than western imitations – minimum bet size has tripled to HK$1,200 ($155) over the past 18 months, as demand for gambling in Macau outstrips the supply of tables.
Despite concern that increased regulatory scrutiny from the watchful Chinese authorities could constrain the big bucks many casinos are making, Mr Chadha believes a happy harmony has developed between the two sides.
On a recent trip to Macau, for example, he spotted a sign outside a casino advising guests to “gamble responsibly”.
Wise words for high rollers and fund managers alike.
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Curriculum vitae
Rahul Chadha
Education
BA business studies, and masters in finance and control, University of Delhi
1999 Research analyst, Dundee Mutual Funds
2003 Senior research analyst, Aviva Life Insurance
2005 Senior equity analyst, Standard Chartered Mutual Funds
2006 Analyst, Mirae Asset Global Investments (Singapore)
2008 Senior portfolio manager, Mirae Asset Global Investments
2011 Co-chief investment officer, Mirae Asset Global Investments (Hong Kong)
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Mirae Asset Global Investments
Established 1998
Assets under management €55bn
Investment professionals 131
Offices Korea, India, Hong Kong, Vietnam, Taiwan, UK, US, Canada and Brazil
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References
- ^ Macau's minimum bet gamble pays off with Chinese punters - FT.com (www.ft.com)
- ^ Orion (markets.ft.com)
- ^ Asian route to the top at luxury brands - FT.com (www.ft.com)
- ^ South Korea proves tough market to crack - FT.com (www.ft.com)
- ^ Yellen pick buys EMs more breathing space - beyondbrics blog - FT.com (blogs.ft.com)
- ^ Minor International (markets.ft.com)
- ^ Galaxy Entertainment (markets.ft.com)
- ^ Samsonite (markets.ft.com)
- ^ Copyright (www.ft.com)
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