AMC Intelligence - August 2015

  • Is digital set to revolutionise the funds industry?
  • People Moves – April, May and June.
  • One Final Thought…

Is digital set to revolutionise the funds industry?

The internet changed the face of the music, airline and taxi industries, but is digital also set to overhaul the asset management industry?
 
A report from French asset servicing giant Caceis and accountancy firm PwC seems to suggest so. It says retail fund distribution is undergoing the most profound structural transformation for 50 years, with technology playing a huge part in this.
 
It lists digital as one of three so-called disrupting factors, alongside tougher regulations and changes in the investor base.

Joe Saliba, deputy chief executive of Caceis, say the asset management industry needs to learn from the experience of other sectors. During the 1990s, the consensus in the airline industry was that air travellers would increasingly use the web as a source of information, but would continue to rely on travel agencies to book tickets, he says.

“The state of the airline industry today, having undergone an almost complete disintermediation, is testament to how much an established industry can shift, when disruptive forces drive change,” Mr Saliba adds.

The funds industry needs to think carefully about how it could be disrupted, former Apple and Tesla executive George Blankenship said last month during the FundForum conference, the big asset management event that takes place yearly.

At the conference, the industry's focus on targeting older investors and traditional distribution through banks and financial advisers was brought into question.

Mr Blankenship warned that so-called millennials, people roughly born between 1980 and 2000, will influence what their parents do in the future. “You will have the customers you have until their children convince them to do something else,” he said.

The Caceis/PwC report, entitled Reshaping Retail Fund Distribution – Winning Strategies and Tactics in a Disrupted Environment, suggests asset managers could face a similar scenario to the airline industry, particularly when it comes to tech-savvy younger investors.  

The funds industry has to move towards “strengthening front-end tools and adopting a multi-channel approach in order to provide clients with multiple touch points through increasing use of social, mobile, analytics and cloud technologies”, it says.

“Creating online, mobile and social media channels to promote products, brand awareness and trust is becoming mainstream in the industry,” it adds.

It adds that the days of investors sitting in a banker’s or financial adviser’s office purchasing financial products are in the past, pointing to the rise of online platforms which sell funds, as well as growing interest among banks in offering online fund sales channels.

“Today, the notion of point-of-sale in the fund industry is increasingly becoming abstract for retail investors,” the report says.

Some asset managers, such as Tianhong Asset Management in China, are already looking to take advantage of the opportunities offered by technology and digital distribution. The fund house teamed up with Alibaba, the Chinese equivalent of Amazon, to launch a money market fund, which raised $65bn (€59.3bn) in its first 12 months.

Elsewhere, asset management firms in India are enjoying strong sales through mobile phone apps.

Asset managers in Europe and the US are also looking into the opportunities offered by non-traditional distribution, spurred on by the success of their Asian counterparts.

In the UK, Aberdeen Asset Management has made a foray into direct-to-consumer distribution through its partnership with UK pensions consultant Hymans Robertson. The Scottish fund giant, which is Europe’s largest listed asset manager, will target end investors in the UK with the launch of a new online service.

Martin Gilbert, chief executive officer of Aberdeen Asset Management, agrees the funds industry has to prepare for the impact digital is set to have. “Digital disruption will come from the development of alternative distribution channels to retail clients. These will be less about buying a product and more about client empowerment, service and experience,” he says.

Elsewhere, NN Investment Partners, the Dutch fund house formerly known as ING Investment Management, has rolled out its own direct-to-consumer platform in the Netherlands and Poland. Called FitVermogen, the platform offers NN funds and was promoted using a modern typography-led ad campaign, complete with bright colours.

Deutsche Asset and Wealth Management is also looking into creating a digital offering for self-directed and engaged investors.

Other asset managers are also weighing up how they could use digital to target investors directly.   

Speaking at the FundForum conference in Monaco, Robert Higginbotham, head of global investment services at T Rowe Price, said: “One of the things I would be looking at is [whether there are] other opportunities to look at different business models, which […] ultimately allow us to reconnect with the client, either through some sort of defined contribution opportunity or a direct retail opportunity.”

There are also efforts to make digital benefit the wider funds industry. The European Funds and Asset Management Association, along with local funds associations, recently put forward proposals to the European commission for a digital passport. This would allow investors to purchase investments, including mutual funds, and manage these online.

Olivier Carré, regulatory and compliance advisory services leader at PwC Luxembourg, says fund firms need to be ready for the big changes ahead.

“Opportunities abound for asset management firms and distributors, but they must understand how to make the most of them,” he says.

“New pricing models, strong client-centric solutions, and increasing integration of social, mobile, analytics and cloud will be essential for those who want to succeed in the new fund distribution landscape.”.

People Moves

Investment

Schroders has announced the appointment of Ashley Lester as the Global Head of Research. He joins from MSCI where he was Head of Fixed Income and Multi-Asset Class Research.

Mirabaud Asset Management has announced the appointment of Paul Schibli as Senior Portfolio Manager covering Swiss equities. He joins from Deutsche Asset &Wealth Management, where he was Head of the Swiss Equities team.

NN Investment Partners has announced the appointment of Ivan Nikolov, who joins the Convertible Bond Team as Senior Portfolio Manager. He previously worked at KNG Securities trading European and Asian convertible bonds as well as carrying out credit research.

BNP Paribas Investment Partners has appointed Matt Joyce as a Portfolio Manager within its multi asset solutions division. He joins from Schroders IM where he worked as a Multi Asset Analyst and Fund Manager.

Amundi has announced the appointment of Vincent Mortier as Deputy CIO. He will also become a member of the executive committee. He joined the Société Générale group in 1996, holding several senior positions.

Mandarine Gestion has appointed Sebastien Lagarde as Equity Portfolio Manager. He joins from AXA IM where he was a Portfolio Manager.

Union Bancaire Privée has announced the appointment of Mathieu Nègre as Head of Emerging Market Equities. He was previously a Portfolio Manager - Global Emerging Markets at RBC Global Asset Management.

Olivier Mulin has been appointed as Fund Manager of the RAM Convertible Bond fund. He will also co-manage the RAM (Lux) Tactical Funds Convertibles Europe fund. He joins from Rothschild & Cie, where he co-managed the Convertible European Bond fund.

Newton’s CIO Simon Pryke is leaving the firm after almost 20 years to pursue more commercial roles. Newton will not appoint a direct replacement.

Ed Legget, Manager of Standard Life Investments’ UK Equity Unconstrained fund, will move to Artemis later this year to assume management of the firm’s UK Growth fund from Tim Steer, who is retiring at the end the year.

Goldman Sachs Asset Management has hired Tony Kelly as Head of Product Development for the firm’s ETF business. He was previously a Senior Executive in BlackRock’s iShares ETF arm.

Sailesh Lad joins AXA Investment Managers as a Senior EMD Portfolio Manager from Ignis Asset Management, where he was an EMD Portfolio Manager. Olga Fedotova will take on the role of Head of Emerging Market Credit in August after moving from UniCredit, where she was an EM Senior Credit Analyst. Damien Buchet, Head of Emerging Markets Fixed Income, is leaving after five years at the firm.

Vontobel has hired Ludovic Colin as a Fixed Income Portfolio Manager from Goldman Sachs in London, where he was a Cross Asset Macro Specialist.

David Hirschmann has joined Permira Debt Managers as Head of Private Credit. He joins from Babson Capital Europe, where he was a Managing Director.

Algebris Investments has hired Simon Peters as a Portfolio Manager for public equity strategies. He joins from PIMCO, where he was Global Financials Portfolio Manager and Analyst.

Léopold Arminjon has joined Lazard as a Portfolio Manager. He will be responsible for running a European long/short equity strategy to be launched later this year and previously worked as a Fund Manager for Henderson Global Investors.

JPMorgan Asset Management has hired Thushka Maharaj as a Strategist in the Global Multi-Asset Solutions group. She joins from Credit Suisse, where she was a Director.

BlackRock has hired Rupert Harrison as Chief Macro-Strategist for Multi-Asset Funds, a former Chief of Staff to George Osborne, the UK chancellor.

Owen Scarrott is joining Schroders as an Equity Analyst covering the materials and energy sectors from Morgan Stanley, where he held a similar role.

Neuberger Berman has formed an Italian private equity team after partnering with Intesa Sanpaolo. Marco Cerrina Feroni and Fabio Canè, who led Intesa Sanpaolo’s private equity business, have joined along with Stefano Bontempelli, who rejoins after previously working in Neuberger’s European Private Equity Team.

Schroders is expanding its global fixed income multi-sector team. Paul Grainger joins as a Senior Portfolio Manager from Wellington Management while Mads Nielsen takes on the role of Quantitative Strategist after moving from GLG Partners.

Jupiter Fund Management has hired Jason Pidcock from Newton Investment Management, where he was Manager of the £ Asian Income fund.

Columbia Threadneedle has appointed Mark Nichols as a Portfolio Manager in the European Equities team. He moves from F&C Investments, where he was Director, European Equities.

Marshall Wace, the $20bn hedge fund manager, has poached a five-strong quant team led by Philippe Azoulay from 80 Capital, a London-based hedge fund.

Two Portfolio Managers have left Carmignac Gestion to run an unconstrained emerging equity strategy for Man GLG. Simon Pickard was formerly Head of Emerging Market Equities, while Edward Cole was Co-Manager of its Emerging Market Multi-Strategy fund.

Eaton Vance’s international arm has poached two senior equity managers from Goldman Sachs Asset Management. Christopher Dyer, former Head of European Equity, joins as Director of Global Equity, while Aidan Farrell, who ran small-cap equities, becomes Global Small-Cap Portfolio Manager.

Tim Day and Chris Ford, former Co-Leads of Global Equities at Pictet Asset Management, are joining Smith & Williamson to run a Global Equity and a US Equity fund.

PIMCO has hired the former Chairman of the Federal Reserve, Ben Bernanke, as a Senior Adviser.

Sajiv Vaid is moving to the fixed income team at Fidelity Worldwide Investment in August. He joins from Royal London Asset Management, where he was a Fund Manager.

Liontrust has hired a Global Equity team from BMO Global Asset Management. Kristof Bulkai, Patrick Cadell and Hugo Rogers, have been managing the F&C Directional Opportunities and the F&C Water and Agriculture funds.

Investec Asset Management has appointed Jeff Boswell and Garland Hansmann to their Global Multi-Asset team. Both Boswell and Hansmann join from Intermediate Capital Group PLC where Boswell was previously Head of High Yield, and Hansmann was Head of Portfolio Management within the Credit Fund Management division.

Simon Young has now been appointed as UK Equities Fund Manager for Aviva Investors. He joins from BlackRock, where he was UK Equities Fund Manager.

Old Mutual Global Investors has hired Russ Oxley, a former Manager at Ignis, as Head of Fixed Income Absolute Return. Also joining is David Cameron-Mowat as a UK Equity Analyst. He joins from UBS where he worked as UK Small and Mid-Cap Equity Sales, Associate Director.

Legal & General Investment Management has made two hires for its Fixed Income Emerging Markets team in London. Philip Meier joins as a Portfolio Manager from AXA Investment Managers, where he was a Senior Portfolio Manager in its EM Fixed Income team and John Gray takes on the role of Credit Analyst after moving from the Royal Bank of Scotland, where he was a Vice President within the EM Credit Trading team.

Amundi, has hired Laurent Ducoin as Head of European Equities from Carmignac, where he was Head of European Equity team and Fund Manager.

 

Distribution

Keith Skeoch, current CEO of Standard Life Investments, is to take over from David Nish, who will step down in August after six years as CEO and nine years as a director of the company.

Sanlam’s Head of Business Development Andy Davies has joined Momentum Global Investment Management as Head of UK Retail Sales.

Crux Asset Management, the recently-launched boutique set up by European Equity Manager Richard Pease, has hired Karen Zachary as COO. She was most recently Global Head of Client Operations and Outsourcing at Man Group.

Old Mutual Wealth has hired Andrew Miller as an Investment Specialist in its sales team. He was previously an Investment Development Manager at Architas Multi-Manager.

Sir Hector Sants has joined Julius Baer International Limited as Chairman. He succeeds Gian A. Rossi, who will step down.

Martin Jufer has joined GAM as Regional Head Continental Europe, replacing Michele Porro.

Edmond de Rothschild Group has appointed Thomas Gerhardt as CEO of Edmond de Rothschild Asset Management. He is set to replace Konstantin Metthenheimer, who will leave the group. He has been with EdRAM since 2011, as Head of Emerging Markets and Commodities.

Schroders has appointed Yves Desjardins as Head of Institutional Clients France. He joins from HSBC Global Asset Management.

PIMCO has announced the appointment of Matthieu Louanges, Managing Director, as Head of France. He replaces Emanuele Ravano, who still heads PIMCO’s Global Wealth Management team in Europe.

Jupiter has announced the appointment of Nick Ring as Global Head of Distribution. He will join in September from Columbia Threadneedle Investments, where latterly he was Global Head of Product.

Columbia Threadneedle has hired Aldo Melloni as Senior Sales Manager. He joins from the Allianz group where he covered a number of sales roles.

German asset manager Flossbach von Storch has appointed Oliver Morath as Managing Director in charge of Business Development, Sales and Marketing. He joins from Barings Asset Management, where he was Head of Wholesale Distribution EMEA. Baring Asset Management has in turn announced the appointment of Rod Aldridge as his replacement.

NN Investment Partners has appointed Philippe Fidaire as CEO of NN IP France. He was hitherto working as Lead Senior Institutional Sales of the firm in Paris.

Tobias Pross has been promoted to Head of EMEA at Allianz Global Investors.

AXA Investment Managers Italia has boosted its retail team with the hire of Fabiano Galli as Senior Sales Manager. Prior to this he was an Associate Director at Russell Investments.

Schroders has appointed John Griffiths as Head of UK Institutional Sales and Business Development. He joins from PIMCO, where he was Co-Head of Northern Europe.

Claude Chene has joined Manulife Asset Management as Global Head of Distribution. He joins from Ignis Asset Management, where he held a similar role.

Macquarie Investment Management has hired Austin McBride as Head of UK Wholesale. He joined from Ignis Asset Management, where he held a similar role.

Frederic Niamkey has moved to Mirae as Head of Sales. He previously worked at Aberdeen, where he was a Senior Business Development Manager.

Martin Lasance has joined Fidelity Worldwide Investment as Head of Institutional Sales in Switzerland. He previously held a similar role at Franklin Templeton.

Andrew Jones has moved to F&C Investments as Director of Consultant Relations. He joins from Insight Investments, where he held a similar role.

Aviva Investors has hired James Tothill as Head of Third-Party Sales. He joins from Aria Capital Management, where he was Head of Strategic Partnerships.

New York Life Investment Management has named Yie-Hsin Hung as its new CEO, replacing Drew Lawton who is retiring at the end of the year. She is currently the firm’s co-president along with Stephen Fisher, who becomes Sole President of the investment management arm.

Florence Dard is returning to AXA Investment Managers as Head of France. She is moving from Edmond de Rothschild Asset Management, where she was latterly Head of European Institutional Sales and Sovereign Wealth Funds.

Elizabeth Para has moved to Newton as UK Institutional Business Development Manager. She joins from Fundsmith, where she worked in Institutional Business Development and Consultant Relations.

Peter Cazalet has moved to UBS GAM as an Executive Director with a focus on business development across the UK pension sector. He previously worked at JPMorgan as a Managing Director, UK Institutional.

UBS Global Asset Management has appointed Oliver Bilal as Head of EMEA. He joins from Pioneer Investments (Germany), where he was Managing Director responsible for Institutional and Wholesale Sales. He replaces Andreas Schlatter, who will focus on his role as Head of Distribution for UBS GAM.

Principal Global Investors, has hired Helly Pilavachi as Director of European Fund Distribution. She joined in January from JO Hambro Capital, where she was Director of European Sales.

 

And one final thought...

Goldman falls out of list of top-10 European Fund Managers

Goldman Sachs and Natixis have fallen out of a list of the top 10 bestselling fund managers in Europe, as some investment companies struggled to cope with the fallout from the Greek crisis, says the Financial Times in July.
The two fund companies have been replaced by Deutsche Asset & Wealth Management and Invesco, according to estimates for the first half of the year from Morningstar, the data provider.

DeAWM notched up sales of almost €7.3bn and was the fifth bestselling manager, while Invesco took 10th spot with inflows of almost €5bn.

Ali Masarwah, European research analyst at Morningstar, is quoted in the FT as saying the bond market correction in May and re-emergence of the Greek crisis made “markets jittery”, resulting in outflows from long-term bond funds. “Inflows into equity funds were quite compressed,” he said.

In the early part of the year there was a “huge surge” of inflows across a variety of funds on the back of quantitative easing plans in Europe, he added.

The mantle of bestselling manager was won by BlackRock, with net sales of more than €13bn.

Franklin Templeton retained the title of having the largest outflows. More than €8.5bn has flowed out of its funds so far this year, compared with €5.6bn for the first six months of 2014.

The Templeton Global Bond Fund, with outflows of more than €3bn, ranks as the worst-selling fund in Europe.
Mr Masarwah said Franklin is being hit by the “double whammy” of both long-term bond funds and emerging market funds being out of favour.