A year on, Natixis confirms its faith in Spain

Just over a year after it launched in Madrid, Natixis Global Asset Management managing director Sophie del Campohas remains focused on the target of becoming a top ten player in the market.

French asset manager Natixis Global Asset Management (NGAM) has made a big bet on Spain. It began operations in Iberia in July 2011, when it launched an office in Madrid. Just over a year later, NGAM has implemented a multi-affiliate model in the market.

“We have registered a broad product range allowing access to the funds of more than 20 investment affiliates in Europe, Asia and the US; secured numerous distribution agreements with national and international companies; signed a number of mandates in Spain; and begun operating in Portugal and Latin America,” Sophie del Campo, managing director of the company, responsible for business development in Spain, Portugal and Latin America.

Del Campo is the first to admit that in the current market scenario, the launch of Spanish operations has been a bet, which so far has proved successful. “We target primarily institutional clients, banks, private banking, distribution platforms and family offices. Spanish investors are looking for products that manage volatility and provide a clear understanding of risk,” she says.

In this context, Natixis believes it and its affiliates can add value to Spanish investors. Through Loomis, Sayle and Company it offers global and fixed income funds; Natixis Asset Management has credit sovereign debt and volatility funds; and Harris Associates offers a global and US value-focused approach.

According to the manager, the global financial crisis has created the need to adopt a new investment strategy, which allows investors to focus more on risk during the asset allocation process, to better manage volatility, to achieve real diversification and to construct portfolios that succeed in up-and-down markets. “In the face of a prolonged period of volatility and uncertainty, no market, no country, no investor is immune to economic turbulence. There are no safe havens; there are only more durable investments,” del Campo says.

Worldwide, Natixis has launched a ‘Durable Portfolio Construction’ platform to help investors build durable portfolios that are capable of generating returns in accordance with risk via the management of volatility and improved diversification. “Investors need solutions that help them meet their performance objectives and minimise risk in up-and-down markets, and that allow them to continue to focus on their long-term objectives. This is the essence of durable portfolio construction,” she says.

The search for new solutions

Clients demand different kinds of solutions depending on their profile, but Spanish investors are generally looking for new investment solutions to help them achieve real diversification in their portfolios through non-correlated assets: “They want products that help them manage volatility while still achieving yield, with a clear understanding of how the product fits in with their risk budgeting. A challenge to asset management firms is to help clients understand the risk profile of the portfolios.”

From the Madrid office, managers are free to choose investment solutions from the group’s wide range, picking ones that make real sense for the Spanish investor in the current context. Managing volatility and understanding risk will continue to be the main concerns for Spanish investors over the next month.

Meanwhile, alternatives strategies are playing an increasingly important role in portfolio construction for a wide range of investors, whether seeking to enhance diversification, manage portfolio risk or pursue alpha.

“What’s clear is the need to expand the tool set at the disposal of investment professionals,” del Campo says. Given the lack of faith in traditional asset allocation strategies across the investment marketplace, alternatives may pose a significant opportunity. “The addition of even a small allocation of alternatives to a more risk-managed core portfolio may reduce volatility without a significant drop-off in returns. This one step alone would appear to address the issue that vexes investors most,” she says.

Looking ahead, NGAM’s objective is to rank among the top ten biggest international managers in Spain, in terms of AUM. Del Campo adds: “We also have plans to grow in Latin America, where we see attractive opportunities.”

 

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