Asia, responsible investment key for Axa IM in 2013
Axa Investment Management’s key areas for 2013 are Asia and Europe, and it is refocusing on India and China as its emerging market priorities where it sees growth potential, according to CEO Dominique Carrel-Billiard.
It is a simple vision but not an easy one to deliver: to run a thriving, innovative asset management firm, with a strong base in its home market in France, but an international ambition and capability.
Axa IM started in 1994 in Paris, expanded into Europe and now operates in 22 countries as one of the largest European-based asset managers with €547bn in assets under management as of the end of June 2012. It employs some 2,400 people around the world.
“We are number 15 in the world and we want to move up,” says chief executive Dominique Carrel-Billiard, stressing that the firm really wants to become international.
“We have to first expand distribution and generate resources to fund new investment in new countries, and do it in a way that maximises our autonomy so we have an organic growth strategy that is self-funded.”
Asia is the firm’s main focus for the next year. Axa Framlington, based in London and Paris, will open a Hong Kong office. The firm had €23.9bn assets under management at end June 2012. Carrel-Billiard says its equities platform is to hire a two-person investment team in Hong Kong, complemented by staff from the London office.
AXA Rosenberg, with some €20bn AuM, is also re-launching its product in Asia. The quantitative equity manager invests in 23,000 global stocks, driven by a process that locks in strong investment beliefs, fundamental knowledge and valuation technology.
However, in 2010 it emerged that the automation was flawed. “It has had some issues,” agrees Carrel-Billiard “There was a bug in the system. It wasn’t fixed immediately. The fund manager lost $50bn from client withdrawals.”
The firm, one of the largest quantitative managers in the world, is steadily rebuilding confidence, largely on the back of its emerging market and Asia (excluding Japan) expertise. “We can rebuild a vibrant platform,” says Carrel-Billiard.
But he adds that Axa IM has no plans for acquisitions in the Asia region. “Consolidation in the industry is not happening through acquisitions,” says Carrel-Billiard. “So why acquire it when you can take it?”
The focus on East Asia follows Axa IM’s announcement in late October of the hiring of economist Qi Sun from the Hong Kong Monetary Authority. He will cover emerging Asia and report to Paris-based chief strategist Franz Wenzel.
However, there will be no change to Axa IM’s operating model in Asia. “The model that we have is a global model,” said Carrel-Billiard. “That is the multi-expert model we have developed, where our experts are in full control of investment management processes, but share all other functions starting with distribution and support functions.”
“In Asia we are doing the same, except that in some countries we have to partner with local partners in order to be able operate in the countries. That is the case in China, in India and in Korea.”