Standard Life targets clients in Europe
Standard Life Investments, headquartered in Edinburgh, is perhaps best known for its presence in the UK. But European clients make up 9% of its nearly €200bn assets under management.
Among them are Finnish pension funds, Danish and Dutch fiduciary managers, Spanish funds of funds and corporate pension plans in Germany.
As the firm grows, it is looking to further strengthen its presence and capabilities in the European region.
In April, the firm announced the registration of its Sicav fund range in Switzerland, including its Global Absolute Returns Strategies (GARS), European Corporate Bond, Global Inflation-Linked Bond, and Global High Yield Bond Sicavs.
The move also broadened its distribution footprint in Europe’s institutional and wholesale markets, particularly facilitating access to the popular GARS fund.
This offering has been one of the most popular solutions for European allocators, as the situation on the global markets continues to drive demand for absolute return products.
The firm says the GARS fund has been no exception, having seen significant inflows this summer.
Yet last week saw a blow to the fund’s team, as three of its senior investment managers – David Millar, Dave Jubb and Richard Batty – left to set up a new multi-asset group at rival fund manager Invesco Perpetual.
Last week brought some good news too, however, as fund manager Wesley McCoy returned to the company as investment director in the global equities team, after leaving the firm to pursue charity work back in 2008.
The firm’s European equity fund has been awarded new ratings by Morningstar for producing top performance. The income fund has come in the top decile over one, two and three years, making 40.6% since its 2009 launch, beating the 32.3% sector gains.
The Sicav fund has also done well. It has returned 21.6% since inception, against an average sector loss of 16.5%.
Yet European investors remain risk averse and equities are still nowhere near the top of their shopping lists.
SLI identifies European credit, absolute return, real estate and private equity as the assets classes enjoying the highest demand from European clients. Other asset classes attracting interest are global bond solutions, emerging market debt and low volatility strategies.
The firm is looking to increase its services to European clients in these areas, although no new Europe-focused hires have been announced yet.
SLI says the main challenge in serving European clients is the fact that “Europe is not an homogenous region, so client concerns and requirements vary.”
Yet it does identify some common themes, such as the search for yield, concerns about pension fund solvency and Solvency II rules for insurers and the need for “secure, stable, long term relationships.”
SLI’s CEO Keith Skeoch pointed to the importance of a long term outlook in the firm’s investment strategy. He is convinced that “most money is to be made by working out long term investment trends.”
With a large proportion of institutional clients, SLI believes the long term outlook must be encouraged in the investment community, which is becoming increasingly short term oriented due to the pressures of global market volatility.