New era calls for new approaches, says Natixis Global Associates team
Corporate structures, business practices, keeping clients and defining investment terms were all subjects on the minds of European country heads at Natixis Global Associates, the distribution arm of Natixis Global Asset Management, at a recent meeting.
Ed Farrington, managing director Global Key Accounts, Natixis Global Associates (NGA), said: Our world is about the client. The other world can be about having a fund and trying to scale it globally, which is about your own organisation. Our strength is about solving the client’s problems, not our problems.
Hervé Guinamant, president, NGA International, said : We try to optimise in a pyramid way in terms of product. The idea is to serve locally but optimise in terms of marketing resources, product push, strategy, new solutions, globally. We also want to avoid silos where each may have a very strong operation locally, but they don’t talk to each other. We have one team, and we meet to define and review strategy on a quarterly basis to make sure we are on the same page. We try, at the same time, to respect what is purely local.
EF: My experience is that one of the mistakes big companies make is trying to take a single product and scale it across the world. That is not the way to approach global markets. What you need is a single platform able to respond to local needs. Multi-boutique is really well suited for expanding itself globally, because inside of one fund family you can have multiple responses and options to similar global themes.
Where that is really showing up today is in the innovative area of alternatives, which seems to mean different things in different markets. We have had success with AlphaSimplexGroup’s beta application strategy in Switzerland, but H2O Asset Management seems to have a purer absolute return global macro ideal, and has taken root in Italy.
HG: Yes, last year we did a white-label product for a big Swiss bank.
It was a complete tailor-made strategy regarding risk appetite.
Terry Mellish, UK head and head of the global consultants business NGA, said: I’ve been here 15 months and the beauty of dealing with a number of affililiated, yet autonomous asset managers is that I’ve been able to create solutions for clients instead of just taking a product off the shelf and sticking the client name on it.
EF: I would frankly be doubtful if somebody comes to me as a potential product partner and says: ‘I have a single fund that will apply to all the markets you serve.’ We recognise there might be a thematic global need, meaning further diversified portfolios, and give options to further diversify into alternative products, as an example. But we also recognise that might mean different things in different markets.
The ability and flexibility to deliver into a global market place is critical. It’s a unique advantage for us. There has been a wave of innovation post crisis: for example in the world of alternatives or absolute return. We’re able to bring expertise, true recognised industry skill, and bring it to market inside of our distribution capabilities. That’s a really interesting value proposition for a fund selector.
TM: The crisis has been hugely painful for most clients. We went through a two-year period of de-risking. Now, certainly in the UK, you’re seeing a trend to re-risk. Clients have a lot of cash but may not know where to put their money. The question is not to take risk off the table, but how to spend that money wisely. How can they allocate to make their risk budget more effective? That could be going into alternatives, or back into smart equities, or very concentrated high alpha equity solutions, or absolute return.