Fund buying increasingly centralised

The professional fund buying process is centralising more and more, leading big bank platforms such as UBS, Citigroup or Deutsche to offer the same product range in all the markets they are active in, mostly for administrative convenience, cost issues and risk monitoring. Big product players, able to register their funds in every market and deliver the same service levels, tend to benefit from this trend. And this was reflected in the sales flows, especially when the market was in a growth period, explained Diana MacKay, CEO at Lipper Feri. Natixis Global Asset Management, who moved into the European third-party distribution arena three years ago, is making the most of its large size (E576bn), managed by over 20 Asian, European and US-based affiliates, to develop close relationships with large bank platforms. It is also leveraging on agreements established in the very mature open architecture US market. Through its independent distribution arm Natixis Global Associates (NGA), the primary asset management subsidiary of Natixis, the jointly held bank of Caisse d’Epargne and Banque Populaire, now has on its list of distributors 10 big global names, including Merrill Lynch, UBS, Citigroup and Credit Suisse. “These big global clients can have from one to three selection platforms in the world. We work in parallel on those targets and when a fund is selected by one platform we push the same fund, providing the same support, to all other countries. We negotiate a global approach and then we act local,” said Hervé Guinamant, president and CEO at NGA international. NGA international, ex US and ex France, is distributing around $35bn (E22.3bn) to third-parties, explained Mr Guinamant. Last year the firm raised $10bn in net inflows and the split between institutions and distributors, which until three years ago was around 80/20, is also gradually rebalancing. The distribution part is increasing, said Mr Guinamant, but he mentioned that the European fund market is tougher than in the rest of the world today. Sebastian Masson, managing director of European sales at NGA, explained that the firm is making good inroads selling its investment solutions and best of breed Luxembourg Sicav to Italian banks mainly, and German distributors. They are also starting seeing results in Benelux, Switzerland and Spain. “Thanks to our multi-boutique approach we offer 140 strategies in our group and we can provide five or six strategies for any client need,” he said.