Hugh Wheelan looks at the uphill push that going global means for most managers
Globalisation may be the buzzword in asset management today, but as the IPE survey on assets under management shows, for most investment managers business is still very much in their continent of origin. And the probability is that this business is domestically orientated, when taking into account the high percentage of pension funds which most of the managers surveyed were running.
However, a divide does appear to be growing between those managers with the size to branch out or acquire successfully and those rooted to their home continents.
The majority of managers surveyed showed only relatively small differences between their global assets under management and those managed in Europe - with few exceeding 10% – particularly those with high proportions of pension fund money.
Notable exceptions include French insurance giant AXA, which has under half of its total assets in Europe, and Dutch player Robeco, which also manages more money outside Europe than inside. Both groups have made significant overseas business purchases to bolster foreign growth.
German-originated Dresdner RCM Global Investors also lives up to its name with over half of its assets outside Europe.
The Netherlands’ ABN Amro Asset Management is managing around one fifth of its assets outside Europe, following a strong push overseas. And large UK players Gartmore, Schroders and Morgan Grenfell all have significant global interests, despite the fact that over 70% of their assets are managed for pension funds.
As a result, critical mass in the amount of assets managed certainly appears to be an important prerequisite for business implantation away from the home continent.
However, the country of origin effect cannot be discounted for those managers making a successful move to a global platform.
This is seen in the sizeable ex-Europe assets managed by the Swiss players surveyed. These range from the larger groups such as Julius Baer down to the smaller investment management companies such as Vontobel Asset Management and Swissca Portfolio Management – possibly resulting from Switzerland’s global background.
Although the large US-originated managers are managing significant blocks of European assets in their own rights, these are far outstripped by their global figures, presumably mainly US assets.
A manager with different roots outside Europe, HSBC Asset Management, bucks the trend though, with over half of its assets in Europe. However, for managers with notable specialist niches such as Global Asset Management, which manages all of its assets via pooled funds, business is already truly world-wide as seen in its relatively minor European asset portion.
But the sense is that for the most part, those managers seeking to be truly strong globally still have a fair way to go.