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Pioneer targets 'organic' growth, Asia in new five-year plan

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  • Pioneer targets 'organic' growth, Asia in new five-year plan

GLOBAL - Pioneer Investments, the €162bn asset manager owned by Italian bank Unicredit, has revealed its first five-year plan since talks around a possible sale or merger of the business came to nothing a year ago.
 
In terms of distribution, chief executive Roger Yates spoke of his ambition to expand Pioneer's presence in the German retail market through its existing relationship with HVB.

But the biggest effort will go into doubling its net sales to Asian clients.

An existing office in Taiwan will soon be joined by a new one in Korea.

Pioneer recently hired Jack Lin from Janus Capital as its new head of Asia and the Middle East.
 
"Pioneer's Asia footprint is much smaller than it should be," said Yates.

Around 51% of the firm's assets under management come from within Italy at the moment.

Its presence in Germany, Austria and Central and Eastern Europe accounts for a further 21%, the US 22% and the rest of the world just 6%.
 
On the products side, the firm is looking to build its emerging markets capabilities in London, its high-dividend expertise in Dublin and its global EAFE strategies in Boston.

Yates noted the importance of US dollar strategies in both fixed income and equities to investors worldwide, but especially in Asia.
 
The new business plan was presented in an environment of volatile markets, shrinking margins and flows gravitating to a smaller and smaller elite of leading firms in passive investment solutions and specialist active management.
 
"Against that backdrop, you have to think very strategically about the markets and channels you want to operate in, and also with whom you want to partner," said Yates.

"We had a series of conversations with interested parties, and it was as clear as day that successful execution of an organic growth plan was the best option for our shareholders, on a five-year view."
 
Asked if potential buyers or partners had been sceptical of Pioneer's plan for growth last year, Yates said discussions had inevitably focused on "the more immediate certainties" of cost-cutting, rather than growth.

"We thought there would be significant disruption, and we came to the view that potential benefits were not worth the cost of that disruption," he said.

"A bigger footprint in Asia would have been helpful, but we are confident we have a significant investment platform to grow organically."
 
After Yates removed the global institutional sales force and re-focused the business on geographical distribution silos in 2010, the firm now counts 25% of its assets under management as institutional, 49% wholesale and 26% retail and private bank-sourced.

Yates envisaged initial growth in Asia would be dominated by wholesale, with institutions such as sovereign wealth funds, large pension funds and central banks developing later.

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