AMC Intelligence – November 2015

  • European Asset Management Distribution in 2016 and Beyond
  • People Moves – August, September and October 2015
  • One Final Thought…

European Asset Management Distribution in 2016 and Beyond

In 2015, we worked with a range of UK and European based Asset Management firms seeking to hire talent into a variety of leadership roles within their firms. These roles have included Global Head of Third Party Distribution, EMEA Heads of Product, Head of Consultant Relations, Regional Heads of Sales, Global Heads of Marketing and Business Support for Distribution Heads. These hires have been located in London, Paris, Brussels, Copenhagen, Cologne, Zurich and The Hague.

Our clients are reacting to a variety of changes impacting their businesses. We highlight key issues the industry needs to think about and how it might respond to them.

What are the factors driving change?

1) Regulatory reform – Increasing levels of regulatory scrutiny at both a local and EU level are shaping new distribution models. It is not uncommon to find firms facing 50 or more new combined regulatory initiatives. Further, additional costs of compliance are having to be factored in to firms’ business models and pricing structures.

2) Inadequacy of data systems – Firms are increasingly leveraging big data systems not just for reporting requirements, but to gain a competitive edge in sales, marketing, client service and business development.

3) The end of revenue-sharing – The impact of MIFID II and RDR will eventually lead to the end of incentivised sales arrangements. This will force many distributors out of business, with the likely replacement coming from electronic platforms. Indeed, the established Investment Platform market is only likely to grow in importance.

4) Increasing importance of bank-centric distribution – Due to their size, tight control over investor wallet share and substantial sales infrastructure, banks are becoming even more important as a key distributor. However, alternative channels including Insurance Firms and key IFAs will also gradually rise in importance along with a growing trend towards D2C distribution.

5) Convergence between traditional and alternative strategies – The increasing proliferation of UCITS frameworks will see a continued rise in the number of new alternative strategies being launched.

6) Social Media – It is likely to become the dominant tool for firms to establish brand identity, create product differentiation and challenge commodification. Forecasts suggest by 2020, the majority of buying power will sit with digital savvy consumers.

How might the industry respond?

1) Focus on technology – Whether it’s a better data management system or a more robust electronic distribution platform, technological initiatives will underpin the best distribution strategies.

2) The smartphone – This will not lead to demise of client facing advisors, as predicted by some, but increasingly the smartphone will become an essential access point to asset managers.

3) The need for global distribution models – One of the results of the common investment vehicles which have been provided by recent legislation is increased cross border investor access. This will force a keener focus on a single global distribution strategy.

4) New products and markets – Product development and innovation is now critical for forward thinking asset managers. Many firms will be forced to move beyond their traditional comfort zones, possibly towards alternative strategies or niche funds (SRI etc)

5) Legislation as a game-changing opportunity – MIFID II, RDR and UCITS vehicles have opened up new distribution channels for forward thinking asset managers. Equally the increased ability to access consumers directly through D2C platforms or similar should be capitalised on.

What does this mean from a talent perspective?

1) Regulation – the ongoing need for strong experience in regulatory management within a distribution context is undiminished. The ability to interpret these changes and apply them in a commercial context is a key skill a lot of our clients are seeking. The “shallowness” of this talent pool means sourcing high quality staff with this experience is an ongoing challenge.

2) Product Development – the demographic challenge coupled with investment cycles of low yield and the ongoing need for income means the ability to think strategically about product both now and for the future becomes more and more apparent. Ensuring the firms have a best in class product strategy and development function that can assess market conditions and client appetite in the future and build capability accordingly is a key growth contributor going forwards.

3) A different sell – the changing dynamics of client distribution channels means that a different distribution structure is now required. This means that traditional ways of selling to fund buyers no longer work. Marketing functions and fund buyer proposition need to be far more integrated – online and offline. Client and customer engagement will involve a different skill set in sales – one that is far more solutions led and outcome oriented.

4) Technology – the rapid growth in the use of online channels to reach clients coupled with the need for investment managers to better use the multiple data points that now exist in building client propositions means that getting the right technology talent in place is key. There is a lack of such talent within the FS sector – meaning our clients are having to look outside of FS for such competence.

The Investment Management industry is going through seismic change – in particular for an industry that has for many years operated in a relatively stable environment compared to its peers in other FS sectors. The importance of having the right people in the right roles to execute the change required to ensure the industry is able to respond to the various challenges it faces has never been higher.

People Moves

Investment

Former PIMCO Global Equity Chief Virginie Maisonneuve, who left the firm last August, has established her own research and management consulting boutique Maisonneuve Global Advisors.

NN Investment Partners has announced the appointment of Kees-Jan van de Kamp to the group’s Infrastructure & Project Finance. He joins from NIBC Bank, where he spent the last 14 years in infrastructure and corporate finance across Europe.

Swisscanto has hired Maurizio Pedrini from Credit Suisse Asset Management, where he was Head of Fixed Income, to serve as its new Head of Credit.

Pictet’s Former Head of both European and Swiss Equity, Daniele Scilingo, has joined independent adviser Crossbow Partners to develop an unconstrained equity business for the company. He stepped down from Pictet after 13 years at the end of 2014. His departure was followed by the appointment of Tomás Pintó from Verrazzano Capital.

Chief Executive and Co-Head of Allianz Global Investors Elizabeth Corley is to step down from the role from March 2016, having been appointed Chief Executive in 2005 and promoted to Co-Head in 2011. She will take on a Non-Executive role of vice-Chair for the firm and will be succeeded by Andreas Utermann.

Lombard Odier Investment Managers has added to its Alternative Investments team and launched a Ucits compliant global macro strategy. Vilas Gadkari and Giuseppe Sette join from Brevan Howard, where they were both Portfolio Managers. Jan Szilagyi, a former Portfolio Manager at Fortress, has also joined.

BlackRock’s Head of Alpha Strategies, Quintin Price, is due to leave the group. He will be joining Deutsche Asset Management as Head of Asset Management.

Allianz Global Investors has hired former M&G Fund Manager Mike Riddell to work on its UK-focused portfolios.

JPMorgan Asset Management has hired Alex Stanic as a Portfolio Manager within its Global Equities team. He previously worked at River & Mercantile as Head of Global Equities.

Barclays has made Arne Hassel Chief Investment Officer of the Global Investments and Solutions team in its Wealth and Investment Management divisions. He joins from Coutts, where he was Head of Investments.

Columbia Threadneedle has hired Jeremy Smith to join as Head of UK Equity Research. He joins from Liberum, where he held a similar role. This follows the recruitment of two new Analysts, Phil Macartney and Sonal Sagar.

Distribution

Matthew Lamb has been appointed Co-Head of Alternative Investment Sales at Deutsche Asset Management. He joins from GAM, where he was Head of UK Institutional and Fund Sales.

Chris Davies has joined Candriam Investors Group as Head of UK Distribution from Fidelity Worldwide Investments, where he was Head of Sales.

Columbia Threadneedle Investments has hired Jonathan Dadswell as Head of UK Institutional Sales. He joins from Nomura Asset Management, where he was a Business Development Director.

Rob Barrett has moved to AXA Investment Managers as UK Head of Institutional Sales. He joins from Invesco Perpetual.

Schroders has hired Esther Nass-Fetzmann into its Multi-Asset Investments and Portfolio Solutions Business. She joins from BlackRock where she was most recently Head of UK iShares ETF Sales to Asset Managers and hedge funds.

Alliance Trust’s Chief Executive Katherine Garrett-Cox has stepped down from the board as part of a shareholder triggered shake-up. She will remain Chief Executive of the investment arm, Alliance Trust Investments.

Candriam Investors Group has announced the appointment of Keith Dixson as Head of International Development. He joins from Cheyne Capital where he was a Partner in the Business Development division focusing on North America.

Momentum Global Investment Management has appointed Fidelity FundsNetwork’s Richard Adams and MetLife’s Andy Pook as Business Development Managers.

Jackie Hunt, the Chief Executive of Prudential UK & Europe, has left the provider with immediate effect, having joined from rival Standard Life two years ago. John Foley, currently Group Investment Director has been named as her interim successor.

Hazel Pitchers has moved to AXA Investment Managers as Global Head of Marketing. She joins from BlackRock, where she was a Managing Director, Head of EMEA Retail Marketing.

JPMorgan Asset Management has appointed Sorca Kelly-Scholte as Head of Pension Solutions and Advisory for Europe, the Middle East and Africa, a newly created role. She joins from Russell Investments, where she was Head of EMEA Client Strategy and Research.

BlackRock has hired Monique Donders as Head of Institutional Client Business for the Benelux region. She joins from Robeco.

Michael Samaha has joined Pramerica Investment Management as a Managing Director within its Global Institutional Relationship group. He previously worked at PIMCO.

Barings Asset Management has appointed Simon Jagger as Head of UK Wholesale Distribution. He joins from Schroder Investment Management where he worked in financial services.

Neuberger Berman has hired Jonathan Geoghegan to grow its Intermediary Business. He joins from HSBC Global Asset Management where he was as a Senior Relationship Manager.

Daniel Lee has joined Edmond de Rothschild Asset Management as Head of UK Wholesale. He joined from Allianz Global Investors, where he was a Sales Director.

Mark Barry is joining Robeco to head its Institutional business in London. He joins from Russell Investments, where he was a Managing Director.

M&G Investments has hired Ominder Dhillon as Global Head of Institutional Distribution. He moved from Impax Asset Management, where he was Head of Distribution.

Royal London Asset Management has appointed John Burke as Head of Institutional. His previous role was Head of Business Development at Newton Investment Management.

Rothschild Group has recruited former Mirabaud Sales and Marketing Director Andrew Blair as Head of UK Sales for the group’s asset management divisions.

One Final Thought…

What do Deutsche Bank, Invesco Perpetual, Alliance Trust, Pioneer Investments, Comgest, Allianz Global Investors, Morgan Stanley Investment Management and Fidelity Worldwide Investments have in common? They have all announced changes at CEO level in 2015. Is this a coincidence or a reflection of challenging times in the investment industry? Probably a bit of both, but ultimately it is becoming harder and harder to make money in the investment management sector. With near static revenues, higher costs, emerging market woes, the prospect of an end to the Fed’s bond buying programme and rising interest rates to follow, new leadership may well be needed to navigate investment firms through some choppy waters to come.