Batavia Prosperindo overwhelms local rivals

A home-grown asset management company beats out the giants to win an inaugural award for excellence in Indonesia

 

When Batavia Prosperindo Aset Manajemen opened for business in 1996, it had a clear yet formidable goal: to become one of the leading asset management companies in Indonesia in terms of investment performance, product innovation, distribution network, investor service and good corporate governance. This wasn’t just a slick public relations slogan – it was and remains Batavia Prosperindo’s vision statement. And the company has made good. Despite being a smaller ‘local’ firm competing against domestic state-owned enterprises and multinationals that have trudged into the market, Batavia Prosperindo today is the seventh-largest asset management company in Indonesia, with around $1.25bn in assets under management (AUM).

A year to be proud of
Through its reputation and performance, Batavia Prosperindo has been selected as World Finance Investment Management Company of the Year 2012 for Indonesia. This is the inaugural year for the investment management category in Indonesia, and Batavia Prosperindo came out on top in a close contest. The company’s accomplishments in the past year speak for themselves: achievement of 18 percent growth of assets under management compared to 14 percent average growth for the entire sector. Batavia Prosperindo surpassed $1.2bn in assets under management as of December 2011, making it the largest local privately-owned asset management company in Indonesia, also launching the largest number of new funds in 2011. Batavia Prosperindo’s assets under management are comprised of fixed income (54.46 percent), equity (25.20 percent) and money market (20.34 percent). Its products and services include open-ended funds such as a money market fund, a fixed income fund, a balanced fund, an equity fund, a capital protected fund and the Islamic/Shariah fund. The company also offers white-labelled, closed-ended and private equity funds, as well as bilateral, discretionary service contracts.

Growing stronger together
Batavia Prosperindo’s assets under management have grown steadily during the past six years, including in 2008 despite the global  crisis. Success is no longer only about the performance of the market and products that can generate additional assets under management.

Equally important is the collaboration between Batavia Prosperindo and its distribution partners, as well as its institutional clients having trust in the company to manage more assets. Besides reliable investment performance, this trust is attributed to Batavia Prosperindo’s product innovation and its quality, professional service. Currently, 58 percent of Batavia Prosperindo’s clients are institutional investors including pension funds, insurance companies, foundations and corporations, while the remainder are individual clients serviced by Indonesian and foreign banks who act as distribution partners or selling agents. Batavia Prosperindo has continued to enlarge its distribution network by adding two more prominent banks as selling agents within the past 12 months.  Some of the leading Indonesian and foreign-owned banks in Indonesia distribute Batavia Prosperindo products, including Bank Mandiri, the country’s largest bank by total assets, Bank Negara Indonesia (BNI), Permata Bank, Bank Danamon, HSBC, Commonwealth Bank, DBS Indonesia, Standard Chartered Bank and UOB.

Striving for international standards
The company also reached a professional milestone for the initial public offering of its holding company, Malacca Trust, on the Singapore Stock Exchange in July 2011, increasing its brand awareness and reputation. The decision to publicly list in Singapore was part of its strategy to promote transparency and better corporate governance within the firm, as well as set an example within Indonesia. What better way to accomplish those goals than to list a holding company?

It is common knowledge that companies which plan to publicly list will be scrutinised through the entire process, especially in a country like Singapore, being a prominent international financial centre. Batavia Prosperindo wanted to make sure its counterparts were more comfortable doing business with the firm by showing it is promoting the best corporate governance possible. One of Batavia Prosperindo’s key communications goals with its external partners is to make them understand that while the company is a locally owned Indonesian firm with local expertise, it continually strives to adopt international standards wherever possible throughout its practice. Given its reputation as an innovative investment manager, Batavia Prosperindo continuously tries to improve its standard operational procedures, systems and infrastructure. The company has held ISO 9001 certification in quality management since December 2007, in line with its commitment to promote excellence in corporate governance and integrity, with standard operating procedures in place within all of its work units, including portfolio management, sales and marketing, investment operations, product development, compliance and risk management.

Inside the kitchen
Batavia Prosperindo’s staff works on a standardised procedure with clear rules that are designed to promote effectiveness, efficiency and control. Risk control set is an integrated part of this system. A compliance division ensures that all policies and procedures are undertaken accordingly. For Batavia Prosperindo, investment strategy in regard to asset allocation begins with macro analysis. Key market drivers such as GDP growth, fiscal and monetary policy, country ratings and political stability are factors in determining the company’s overall asset allocation. Batavia Prosperindo uses various sources for macroeconomic outlook, including both in-house and third-party research. Based on macroeconomic analysis, the company determines asset allocation for its funds. Batavia Prosperindo’s Investment Committee is responsible for approving asset allocation for all funds.

The company’s approach to risk and asset liability management includes monthly investment committee meetings to determine relevant limits for asset allocation, sector allocation and stock universe for each portfolio. Batavia Prosperindo’s compliance and risk management unit monitors relevant limits that are set for every portfolio on a daily basis. Upon any breach of any investment threshold, this unit produces a risk management report that is distributed to fund managers as well as the investment committee.

Given the more challenging and competitive asset management environment, the company has remained fully aware of the importance of solid human resources in building a stronger franchise. The company is well armed with experienced and professional staff members in its work units, which is in line with functionalities set by the regulator, including investment, sales and marketing, operations, risk management and compliance.

An even brighter future
Batavia Prosperindo has long understood that customer satisfaction is the key to success, with every individual possessing strong integrity and offering outstanding client service. The company’s staff knows the four-part mission ‘quality’ statement by heart: to render quality and innovative products and investment services that deliver optimum return on investment; to have quality human resources who are professional and have expertise in investment management; to maintain a strong commitment and integrity in managing funds as well as the company; and to provide a customer care unit that is accessible to all customers and selling agents, to ensure that all feedback and queries are properly addressed and responded.

Like its vision statement, Batavia Prosperindo’s motto, ‘Grow and Prosper with Batavia,’ is also a way of life. As recent results show, the company’s clients receive steady growth in their portfolios, unrivaled local knowledge coupled with international best practices and a feeling that despite its success, Batavia Prosperindo is and always will be their ‘local’ firm.

For more information: www.bpam.co.id; Tel: +6221 520 8390; email lilis.setiadi@bpam.co.id

Global recognition
Batavia Prosperindo has been previously recognised for its success. Within Indonesia, the company has won various awards for performance of its many products, including the most recent awards extended to its flagship equity fund, Batavia Dana Saham, for five and seven consecutive years of best performance based on risk-adjusted return for 2012. The series of earlier awards received by the company include some, but not limited to the following list:

Investor Award 2011
Batavia Dana Saham as The Best Mutual Fund for five and seven-year performance

Investor Award 2009
Batavia Dana Saham Syariah as The Best Islamic Equity Fund 2009 for one-year performance

Warta Ekonomi Award 2005
Batavia Dana Saham as The Best Equity Fund for the year of 2004

Investor Award 2005
Batavia Dana Saham as The Best Equity Fund based on the highest return December 2003-2004

Kontan 2005
Batavia Dana Saham as The Best Equity Fund based on five-year performance

AWSJ 1999
Batavia Dana Saham as Leading 10 Performers for Asian Single-Country Equity Funds Category by Lipper Analytical Services International

Lipper Overseas 1998
Batavia Dana Saham as number one in Lipper Overseas Fund Table for one and two-year(s) performance

SWA Sembada Magazine Award 1997
Batavia Dana Saham as The Best Performance in Equity Funds Category

AWSJ 1997
Batavia Dana Saham as Top Fund in Indonesia from Lipper Analytical Survey