Crisis leads houses to big up brands

After a blistering hot summer in the 1970s, Europeans slithered into ever deeper troughs of cold war paranoia. Raised temperatures were routinely blamed on the Americans and Russians’ trials of satellite technology to interfere with natural weather systems. Thirty years later, the recently passed summer has not been one of Europe’s most enjoyable. Unpredicatable and extreme weather conditions have been coupled with an even stormier financial marketplace. In the case of the latter, many of our problems in debt and equity markets are again thought to have been inherited from the other side of the Atlantic, where the sub-prime lending crisis was generated. What started as a localised problem, with low income Americans defaulting on sometimes large mortgages, is spreading its tentacles across the world’s financial system, eating into people’s pensions, bank accounts and employment stability. The world’s central banks have injected massive amounts of short-term liquidity to stabilise money markets, yet conditions remain unstable. The International Monetary Fund (IMF) recently warned that 50 per cent of the house loans made in the US are at very high risk, as they were granted without ascertaining that borrowers were able to repay the mortgage. It is at times like this that distributors are always bombarded with advice and reports from asset management companies. Despite the bad news, this is a good time for them to re-establish their brand. For the unknown groups, it is an opportunity for them to comment on the markets. Cross-border groups such as Threadneedle, F&C and Dexia Asset Management have all been sending out reports, analysing the market situation and describing ways in which clients can benefit from the uncertainty. Both F&C and Dexia have an interest in re-inforcing their brand. Dexia AM needs to make itself known outside Belgium and Luxembourg, if it is to achieve the ambitious targets demanded by its management and aspired to by its meticulously minded new chief executive, Naïm Abou-Jaoudé. F&C is going through a more uncertain period, with major corporate changes, and needs to make sure investors know it is business as usual, and prevent them from making big redemptions. With the boutiques, it is an opportune time to get their name out there to raise assets. Of course, there are those who want to remain boutiques. But there are others who want to develop a bigger brand and eventually compete with the established players. For every time of uncertain or stormy market conditions, there will be winners as well as losers.