Wells Fargo Asset Management set for big push into Europe
Wells Fargo Asset Management, a part of the San Francisco-based bank Wells Fargo, is set for a major strategic push into Europe and Asia as part of a drive to diversify away from the maturing US market.
The move has little to do with short term market turmoil in Europe. “We started looking at this expansion well before 2008,” said Karla Rabusch. A vice president of Wells Fargo & Company, she is also president of Wells Fargo Advantage Funds, part of the corporate’s Asset Management division, and head of Wells Fargo Funds Management LLC, the unit spearheading the European campaign, from a London base.
“The US is no longer growing as quickly as other areas of the world,” she adds. “We have been looking for some time to leverage our strengths in Europe and Asia, and Europe does after all account for 35% of mutual fund assets in the world.”
In the US the firm is the 11th largest among asset managers. The group has 80 business lines, with 30 offices in 130 countries focused on providing US clients with services abroad. Globally, the asset management business has some $450bn in assets under management.
Rabusch, who joined Wells Fargo in 1997 as chief financial officer for the mutual fund business, has already driven expansion from the established investment platforms in the US, through wholly-owned subsidiaries such as First International Advisors in the US, and London-based European Credit Management (ECM), as well as entities in Bermuda and Singapore.
The firm put down roots in Luxembourg in 2008, building a fund range and track record to underpin further expansion from $150m in assets under management to some $1bn in “long term” flows, or $2bn including money market funds.
“Our acquisition of Wacovia at the height of the financial turmoil also helped us build out teams and to grow our international presence,” noted Rabusch. Wells Fargo & Co fought off Citigroup Inc to complete the $12.7bn deal at the start of 2009, after an embattled Wacovia Corp had to write down billions of real estate loans. The merger propelled Wells Fargo up the US rankings in terms of reach and assets.
Andrew Owen, executive vice president of Wells Fargo Funds Management, said the corporate brand was known in Europe, which allowed his team to “open conversations” with the target intermediary market. “It gets us in the door, but we are now explaining our fund management capabilities,” he said. Target markets are Germany, France and Italy, with offices to be established in all three by the end of the year.
The strategy is focused on financial advisers, platforms, private banks and other “gatekeepers”. “Our business resonates best with these intermediaries,” explains Owen. “What they like is our approach to investment management, and also our risk management techniques and reporting.”
Even in the US, fully half of the asset management business comes through independent channels (financial advisers), rather than the bank, so the firm is used to supporting adviser networks. In Europe, Wells Fargo funds are already on 13 platforms, with another 20 platforms to come, covering most of the 38 believed to be operating in the region.