Broadening local appeal
Christian Pellis, global head of External Distribution and member of the Management Committee at Amundi has outlined the manager’s objectives in ensuring local presence.
Amundi is Europe’s biggest asset manager by AUM, with some €759bn of assets according to group figures published to the end of September 2013, and active across a significant range of asset classes and strategies.
That same data suggests that by client, some 45% of assets are managed on behalf of group insurance companies, 33% on behalf of institutional
clients and third party distributors, And 22% on behalf of partner networks and employee savings.
Clearly, this is a large organisation, with particular needs in terms of its future development. As Christian Pellis, the global head of External Distribution/Wholesale explains, there are four key client segments to
maintain: Sovereigns and Institutions, Corporates, and Distribution, i.e., Wholesale.
Then there is the geography to consider. France may be the home market, but there are interests across the globe in terms of business development opportunities for an organisation of this size, including regions such as
Europe, Asia, Latin America and the Middle East.
In the latter, for example, Amundi has been talking to private banks and life insurance companies, Pellis notes. In the US, Amundi has acquired a fixed income house, Amundi Smith Breeden, which has opened up distribution opportunities in the offshore market. When Pellis joined Amundi, it was a well established brand, particularly in France and Southern Europe.
However, as he says: “Competition is changing the relative strengths of brands in and outside of their domestic markets. Our key focus at Amundi is on developing the necessary relationships to support our global distribution objectives.”
Pellis and Amundi have been mapping out global distributors to identify who is responsible for what and at what level within these banks. “Like Amundi, these organisations are globally oriented and we need to approach them the same way. Often you find that where funds are offered to the final
investor is not the place where the funds are selected.”
There is also another question involved in understanding distribution relationships, Pellis says. “Even if Amundi is selected to preferred lists, it does not mean the end client will necessarily buy,” he says.
“The end client needs to know about Amundi. The focus now is on good products being referenced where ‘good’ equals performance, where the product is in demand, where there is capacity, and where Amundi is
known for its product expertise.
“A big brand like Amundi needs to do this. It needs to have the right ingredients to be successful in this space, i.e., distribution.”
In terms of visibility in specific locations, Amundi has been building its office presence.It has opened a Netherlands office, opened a joint ETF/long only office in Sweden (see box out, right), and is focused on UK market opportunities.
“You need to work with local people on the ground, who can deliver. There are a lot of regulations, which mean that there are some restrictions on what can be done.”
Having local offices and people on the ground is seen as a key service differentiator. “You can send as many emails as you wish, but personal
face-to-face makes all the difference,” he says. More offices mean meetings can happen more often in person.
It also gives clients the feeling that, even if it is a small office, that there is commitment on the ground. There are, naturally, variations in what is available in different markets across Europe. In Germany, for example, Amundi is supported by some 15 people locally.
It is a challenging market, Pellis says, in which flows have been somewhat inconsistent, with German investors working closely with their banks to find fund solutions.
Italy, another large market, is different again. It is more focused on financial advisers linked to professional platforms, with more wide-spread distribution requiring much more support on the ground from sales teams,
It is a market where clients will be covered by roadshows focused on the main cities, which stands in contrast with Germany, where the experience is that funds are often selected centrally. This necessitates being closer to Italian financial advisers.
Despite certain differences between markets, there are still themes that hold across Europe, such as wealth preservation. This is especially the case nowadays, given that cash and fixed income alone cannot meet
Investors need to consider equities, but many have been locked up in cash – it is a similar challenge in Asia and the US, Pellis suggests. Investor demand for real returns is leading to demand for asset allocation products.
Meanwhile in the area of long term savings there is the issue of churn and the challenge of investors sticking to recommendations – or not. One key to unlocking this challenge is to create products that can be easily explained, Pellis says.
For this year, Pellis says that Amundi will continue to focus on products that it does well and is known for. This is driven by the acknowledgement that time with clients is always limited, and therefore it pays to focus on what the manager does well – other matters are a waste of time, he feels.
The focus is on themes and information that add value. The manager is also running ‘Amundi Rendez-Vous’ meetings with distribution clients globally. With clients increasingly asking for wealth preservation type funds
across various asset classes, Amundi feels it can deliver.
Meeting clients also serves another key function: “Don’t forget Amundi is a relatively young name,” Pellis says.
Getting on lists is not enough. He feels a need to meet the selectors, to talk to the person talking to the end client to make sure they fully understand what Amundi is doing and what it stands for as a manager. “We need to tell clients what we are good at, and where there is performance.”