Market Overviews


• Article by BRUIN Financial


There have been several notable themes over the last quarter, one of the most significant being M&A activity. From the larger and more widely publicised moves such as Aberdeen Standard Investments and the proposed Prudential and M&G future merger, to the acquisition of smaller firms such as Sanlam Investments, Canaccord Genuity and Davy Wealth acquiring Travistock Financial, Hargreaves Hale and Danske Bank’s wealth management arm respectively, it is clear that more firms are looking to expand via this method rather than organic growth. There have been several proposed unions that are still ongoing such as Rathbones or Tilney with Smith & Williamson and AXA IM with Natixis.

Another trend has been the positioning and growth of ETFs. There have been mixed fortunes across this space with companies such as LGIM winding down their offering after the products “had not performed as hoped”. However companies such as Franklin Templeton and Fidelity have been launching new ETF ranges with the likes of JP Morgan Asset Management set to launch in the coming months.

The emergence of thematic investing has taken a more prominent position, with strategies focusing on millennials, health and wellness and diversity, leading to ETFs accounting for over $4tn in assets compared to $580bn in 2006.

Gender diversity continues being at the top of the agenda for most of asset managers and a recent FT report suggests that hedge funds run by women

have generated returns two times higher than their
male counterparts this year, piling further pressure on a sector that has been branded “male, pale and stale” to recruit more female portfolio managers. Helena Morrisey commented “We definitely need more women in fund management, because we bring slightly different approaches to analysis and risk. Our diversity is complementary,”

Kirsty Pineger, Director at BRUIN and Head of Wealth & Asset Management, has become a member of the Steering Committee for the Women Returners workstream at The Diversity Project, an initiative led by representatives from the investment and savings industries’ biggest institutions, who have come together to solve diversity levels in the industry ‘once and for all’.

The Project is led by a senior-level Steering Group that includes Allianz Global Investors’ Head of Institutional for Europe, Irshaad Ahmad, PLSA Chair, Lesley Williams, Senior Investment Consultants, Jane Welsh from Willis Towers Watson and Sinead Clark from Mercer, along with Carmignac Gestion Managing Director, Maxime Carmignac. The group is chaired by Helena Morrissey, Head of Personal Investing at Legal and General Investment Management, Founder of the 30% Club and Investment Association Chair.

There have been several notable moves in the distribution space, most of which were within advisory and wholesale, and discretionary teams. Neptune bolsters its distribution team with the hire of former AllianzGI sales director Daniel Lee. Simon Clarke joins Time Investments as BD Manager for their long income funds. On the retail side of the market, AJ Bell has appointed Old Mutual Wealth’s head of advisory sales Gary Dale as sales director of its adviser platform and Jupiter have hired Paul Faragher to join its UK sales team as regional sales manager for London and the South East.

At the senior end of the market there have been several high-profile appointments including David Lake who joins Lyxor as Head of UK Sales, Angus Woolhouse, ex Head of Distribution at Barings, joins Insight Investments as Global Head of Distribution and Franciso Arcilla has been appointed Global Head of Sales for overall AXA business. Meanwhile Pictet Asset Management has appointed Massimo Tosato, formerly Global Head of Distribution at Schroders, to its board as a non-executive director and BNP Paribas has hired former Pioneer CEO, Sandro Pierri for a senior sales role within the business.

The theme of asset managers strengthening their sales teams in Europe continues. Germany has been a particularly popular country to expand into, and for the first time we are seeing competition for good salespeople intensify between international and domestic managers in Germany.  This is especially prevalent since the Brexit vote, with some domestic German managers taking advantage of the anxiety felt by some German nationals in London. Within Italy and Switzerland, we have also seen increased hiring, though this has been due to strengthening existing teams rather than new buildouts.

Hiring junior individuals in the Marketing, RFP and Sales support space has also been an in-demand strategy. Rather than bring in new talent at the senior end, firms are opting to promote from within. Some asset managers have been merging their Client Services and RFP teams into one, as a result RFP writers who are also client facing tend to be well received.

More of our clients are looking for Investment Marketing Managers who are technically very strong. Those who have previously worked in an Investment role (for example a Portfolio Manager or Product Specialist) are at a real advantage. Candidates with strong interpersonal skills, who have the confidence and ability to face off to internal stakeholders, are very much sought after.

We have been instructed on a number of team builds including RFP, Investment Content and Marketing, and have seen increased demand from Mangers keen to take advantage of the growing impact of fintech, by strengthening their digital / specialist marketing offering.

Our clients are also looking for salespeople who come from an investment background, or who are technically very strong, so that they are viewed both internally and externally as quasi-product specialists. We are seeing more asset managers hire dedicated product aligned Sales Directors to push their groups into newer areas, such as Real Estate, ETF and DC business lines.

Three separate subjects may have an influence on the final quarter of the financial year:  Brexit, the implementation of MIFID II and M&A activity amongst asset managers. In preparation of these changes, we predict that clients will revaluate their internal and external strategies which could welcome greenfield or hybrid roles which will be outside the current distribution setup.

As previously mentioned, we have witnessed numerous mergers and acquisitions, whilst other institutions have expanded into new asset classes such as adding a passive product range etc. These activities have urged firms to reshape and restructure most of the Sales & Marketing teams, which we envision, will contribute to further growth hires across distribution channels. We have also witnessed numerous asset managers building their ‘internal agencies’ or ‘centres of excellence’ to improve the way marketing services have been supporting the sales capacity across UK and Europe. We predict several firms adopting this model in the coming months.

Traditional asset management firms appear to be looking into more innovative tactics, trying to adapt to the financial services market which is currently evolving at a rapid pace. An obvious area we envision further development is within the digital channel- Rachel Evans of Bloomberg News stated, “overall, digital advice is likely to grow to $1 trillion by 2020”.

Automated advice platforms are poised to expand their presence over the next few years, which we predict, will increase the demand for digital specialists within FS and ultimately asset management. Further to this, we have observed that a range of investment banks and asset managers are considering adopting the ‘blockchain solution’ to reshape their asset transfer systems. Blockchain seem to bring plentiful solution to the common industry problems, but also setting a new standard for the industry as a whole.