BankInvest looks to the outside
Andrea Panzieri, CIO of Denmark’s BankInvest, is stepping up his fund selection activities with the use of external managers.
Reliance on external managers by BankInvest, the asset manager owned by some 40 Danish local and regional banks, is set to increase. So says Andrea Panzieri, chief investment officer, who came into the business in the wake of the global financial crisis after the company’s owners looked to shake things up with new people heading the executive team and the board.
While not the only reason for the change, the financial crisis certainly helped focus minds on what should be at the core of the business: mutual funds and an active long-only approach to the traditional asset classes of equity and fixed income.
Having pretty much completed the first part of the changes envisaged in terms of manufacturing focus “the next big strategic step… is turning the company more into a distribution company as much as an asset management company,” Panzieri says.
This, in turn, implies more use of external managers, thus driving the fund selection activities that Panzieri and his colleagues are developing.
Outsourcing asset management
“One of the things we’re also working on is outsourcing some of the actual asset management. So, in those asset classes where historically we haven’t been able to produce results in today’s competitive and transparent world, we are looking to the outside management teams that can help us with that,” he says.
“For more specialised or reasearch-heavy asset classes, it would be quite logical for us to at least start with the assumption that we’d be better off starting with an external manager than trying to scout the local market or attract people to Copenhagen to start up there.”
A key driver of this change is the amount of regulation hitting the industry, Panzieri says. It follows that there are increased liabilities, especially for retail distribution. This is important for BankInvest because of the fact that its owners serve a large retail customer base. About 80% of the company’s AUM comes from retail clients.
“That has increased the need for local distribution to centralise and be on top of the quality of investment advice given, and ensure that clients portfolios are continuously within the risk scores that have been agreed with the retail clients,” he says.