EUROPE - FundQuest, the €35bn multimanager outfit of BNP Paribas Investment Partners, expects its asset pooling platform to boost the money it runs for the banking group's institutional fiduciary management clients.

"Our fiduciary colleagues are very interested in this," said FundQuest CEO Antony John. "Multimanager is very complementary to what we offer elsewhere in the group."

The firm has been working with RBC Dexia to introduce asset pooling to its multimanager segregated account platform. Asset pooling is becoming widely adopted as a way for multimanagers to lower costs - by paying fees on a single, larger mandate rather than several smaller ones - and make it easier to change underlying managers.

At present, approximately 40% of FundQuest's assets under management comes from institutional investors. But John hopes asset pooling will help it attract more from the 1,500-plus institutional portfolios managed across the group. The Fortis legacy business, in particular, has been building its fiduciary capability in the Benelux region.

"We see it as a big growth area," he said. "Both fiduciary groups see the opportunity in pooling, to get access to a ready-made menu of managers for their fiduciary offering."

As well as its roster of long-only managers, FundQuest is working on projects to include alternative pools in areas such as hedge funds and private equity. 

"We keep both fiduciary teams updated on the development of pooling, and we've had tentative enquiries on behalf of their clients about accessing the platform," John added. "But it has to be said that size is currently the issue."    
The platform currently has 23 pools established with assets in excess of €750m, and participating managers include Cazenove, PSigma, Janus and Petercam. That said, an additional €500m is due to be transferred into the pool by the end of Q1 2010.

"By the end of this year we hope to be €2.5bn - that's the sort of level you need to make pooling cost-effective and compete on TERs. Once we get more assets into the pool we see interest growing substantially," added John.

FundQuest UK will shift its operation to work alongside Fortis Investment Management's mutimanager business imminently, and the two groups are already co-managing portfolios under advisory legal agreements, with a few to full integration around the middle of this year. Fortis's multimanager business manages assets chiefly for its own insurance company and retail and private banks.

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