Signs of strategy convergence

French institutional manager follows American peers to capture clientele.

European institutions are taking the lead from Americans when it comes to wealth management. CDC Ixis, the institutional manager based next to the Gare Montparnasse in Paris, is the latest European house to plan a platform launch for high net worth individuals, hard on the heals of State Street and Amvescap. “The bulk of our business will still come from institutions but we would like to enhance our profitability through some retail exposure,” says Daniel Roy, chief executive of CDC Ixis Asset Management, responsible for E315bn. “We are currently investing money to set up an efficient distribution channel through retail banks in Europe.” The company already operates a similar service in the US through CDC Ixis Advisors. “We would like to significantly grow the 4 per cent of our assets which is in private accounts,” says Mr Roy. Specific products will be adapted from the institutional department to serve “ultra” high net worth clients in the 40-50 year old age bracket. “In terms of wealth management, what you do in Europe always follows what happens in the US,” says Mr Roy. “Many accounts for wealthy individuals are already twice the size of institutional mandates and often more than that in Europe.” Mr Roy’s plan ties in with the conclusion of the “World Wealth Report 2002”, which anticipates greater similarities in the way North American and European providers serve their wealthy client bases. Stock exchanges, which traditionally served the institutions, are also keeping a canny eye on the potential development of a high net worth client base. Borsa Italiana, the Italian stock exchange in Milan, is one of those in the vanguard. It is in the process of launching its MTF segment for exchange-traded funds (ETFs) and sees the listing of hedge funds as a longer-term eventuality. The Borsa has already experienced strong demand for single-stock futures from high net worth investors using its new derivatives platform. More than 7500 contracts are traded a day, predominantly by the retail market. Marketing derivatives products to wealthy investors form a key part of the strategy for the future. “The options market can be a very favourable one for retail investors,” says Raffaele Jerusalmi, director of markets for the Borsa. “Look what has happened in the US, where 65 per cent of the world’s biggest options market is retail money. This is likely to happen in Europe as well.”