Godliman Partners EMEA Distribution Newsletter Q1 2018

May 24th, 2018

Godliman Partners

EMEA Distribution Newsletter

 

Q1 2018 Edition

 

REGIONAL SNAPSHOTS

NORDICS & BENELUX

Asset managers have been seeing a steady trend of Dutch and Nordic clients coming back to active management from passive, particularly in European Equities, Global Credit and Emerging Market Debt. ESG is becoming a mandatory staple across the Nordic and Benelux region, whether it be top-down ESG engagement or standalone ESG strategies. Asset managers are investing in having dedicated ESG Global Equities strategies as demand increases across Northern Europe.

GERMANY

Global asset managers have continued to have good growth in Germany. The most contested battle grounds for newcomers to the region, and established firms have been European Investment Grade, followed by European Rates and Global Fixed Income which match the liabilities of the Institutional market. With so many managers competing for mandates, global firms have been attempting to enter the market via the Private Markets route, however this is quickly becoming a saturated market.

SWITZERLAND

Like Germany, Switzerland continues to be an attractive target market for Distribution teams however, it is proving to be a problematic hiring conundrum for senior managers. A number of our market sources are actively looking at adding talent in Zurich and/or Geneva, but the talent pool is relatively small versus the more established international asset management markets. As stopgap are leveraging their teams in France and Germany to cover either French-speaking or German-speaking Switzerland respectively.

diagram 1

EMEA Hires Q1 2018 (by Region)

NO ALTERNATIVES?

Generalist sales teams have had difficulty being able to properly represent complex Alternative strategies to their clients. As a result, a number of firms have been diversifying their team structures to embed expertise across Private Markets, and other Alternative strategies.

BROADER TRENDS

BREXIT INSURANCE

Both large and small investment managers are using Brexit as an opportunity to invest in their local office networks for Distribution. Whilst the regulator is focusing on the need for firms to have “significant presence” in the European Union post-Brexit, the perceived advice is that most firms are hiring middle and back office teams in Dublin and Luxembourg to insulate them against a hard Brexit. On this basis, Distribution and Investments are not yet directly affected.

Nevertheless, businesses are recognising that now may be a good time to show further commitment to investors on the Continent by having Sales and Relationship Managers on the ground. So far, we have seen no particular bias in terms of which countries are seeing most local office growth, as it is spread across Continental Europe.

THE RISE OF THE PLAYER-COACH

With Sales teams attempting to stay lean, firms are increasingly cutting unnecessary management layers. Some firms have chosen to pare back all global functions, whilst others have let go regional heads that do not have an active sales role.

Increasingly, we are seeing regional heads asked to continue to be a revenue-producer, whilst also managing the team. There have been many examples recently where we know the Head of EMEA is covering large strategic accounts and Middle Eastern Sovereign Wealth Funds themselves.

diagram 2

EMEA Hires Q1 2018 (by Channel)

UNDER PRESSURE

Fee pressure continues to be a headache for asset managers on the Liquid side. This is less prevalent in the Illiquid space, where demand for things such as Private Debt far outweighs the supply. If asset managers can justify that what they offer is niche then typically they are feeling less pressure.

SELL-SIDE TALENT POOL

As the pull of the buy-side grows, asset managers have been taking advantage, by approaching sell-side salespeople to transition over. The types of profiles that are favoured will come from a Solutions background and not a Flow Sales background. These candidates are much better suited to making a successful transition into Asset Management.

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