Some work hard, others work smart. In today’s market, companies too often equate success
with size – takeover or
be damned. Sinopia, the CCF-owned boutique – fast becoming a novelty in the European asset management market – is thinking laterally. It has many items on its agenda as a newly stock exchange-listed company, but one of them is most definitely not to join the realm of the giants.
Sinopia’s own approach to conquering the European market is not to compete with its competitors, but to service them. As such, it will not be playing the market share game. And Didier Miqueu, Sinopia’s chairman is adamant about this. “Our strategy cannot be one of gaining market share, we are not a global player in that sense and we cannot define our strategy by the market share that we have in this market - we are too small and certainly we will remain small in this big market for some time.”
Sinopia is one of the true European niche players,
a boutique in terms of size and attitude. It started as a three-person strong research house a decade ago with one FFr10m portfolio, and now has 80 staff, mainly in Paris, with nearly Ffr40bn under management. It’s two specialities are European equities and global hedged bonds, and the fact that these two products are at opposite ends of a product range, gives an insight into Sinopia’s chameleon-like approach. Sinopia wears two hats, and this applies not only to its limited product range but to the clientele it is planning to hit hard with it over the next few years. Sinopia plans to bridge the gap between the institiutional – its priority target – and retail markets by servicing the retail fund sponsors with institutional products Sinopia provides directly to its own clients. And this means to purposefully not compete head on and distribute its own products alongside the likes of Fidelity, which in Miqueu’s mind is a no-win situation. “If we can be there and service those guys efficiently, they will want to work with us because we don’t compete with them.”
Sinopia’s tactical asset allocation product is already serving both sides of the market – beginning its life as an institutional product for both equity and fixed income, Sinopia raised almost $2bn of institutional money and then split it into three products of varying risk levels for the retail market based out of Luxembourg. “All those products exist under a different name in the institional market. They’re essentially managed the same way, but you have pooled funds on one side and SICAVs on the other. And there is no reason why those two areas can’t feed off one another.”
Sinopia’s philosophy to bridge this is that it does not need a sea change in terms of investment strategy, style and research, it just needs a good command of language. “When you talk to institutions, they want to see the engine, so you open up the bonnet and show it to them. They want to see everything about it. If you want to sell this product to retail, don’t show them all of this, they don’t care – they have money, they don’t know what to do with it, and they want a solution for their needs. So if you can package the same product, the same story, and change the words, change the presentation and show them this product can satisfy the needs of the retail client, you’ve got the story to the retail base.
“The asset management business in Europe is going to grow faster than any place else over the next five years or so. We have spent the last few months in Italy for better or for worse in this way. It is a strategic market for us and we are going to attack it the same way we attached the French market – it is going to be institutional and distribution systems.
“We are in the process of registering our funds now. We will treat Spain the same way and we are already started to target Holland for institional business, especially for tactical asset allocation.”
Sinopia is equally clear on how it can gain access to these markets. “We like partnerships,” says Miqueu. Three of its key shareholders are BBV, KBC, Mellon, automically getting Sinopia access into Spain and Belgium. “They have been business partners before and we really believe in partners whether it is internally, with shareholders, with clients – we like long term strategic alliances.” Miqueu views this as a win-win situation as it will be in the shareholders interest for Sinopia’s products to be successful. Hence its shareholders also double up as its distributors.
“We may create a venture, we may bring in some more partners into owning Sinopia like we did with BBV, or we can do things like we did in Japan with Tao Life, the insurance company who we have been working with for 10 years. We can be patient and we are ready to show we can work with all sorts of organisations.”
You have got to be realistic, says Miqueu, in realising that partnerships are the only real way Sinopia will actually access these markets. “We are never going to have 200 salespeople in Italy, or in Holland, so we have to attach ourselves to the most efficient lead for us.”
Sinopia has been growing very impressively in terms of new clients and assets which has been averaging out at 35–40% per year. Even in light of this, equivalent growth in terms of personnel is out of the question. “What is the optimal size of a fund management company?” asks Miqueu. “Some pretend that they have 1,500 fund managers working today – can you tell me how you can make that happen? Each benefitting from the work of each other? It is just not possible.” Rachel Oliver