When Natixis Global Asset Management decided in 2011 to open an office in Madrid, with Sophie del Campo at the helm, it wasn’t only seeking to expand its business in Iberia, but also thought of Spain as leverage to gain momentum toward Latin America. Del Campo, CEO at Natixis Global AM for Iberia, Latin America, and US Offshore, assumed the task and then began to explore the opportunities for, when the time was right, take the leap across the Atlantic. And that time has come: she has just opened an office in Mexico with Mauricio Giordano at the helm, the first part of an ambitious strategic project that within the next few months will have a physical presence in Uruguay, and Colombia, as points from which to cover the Spanish speaking region, and with which it aims to become one of the top management companies in the region.
"Latin America has all the components needed to build a lasting business: a growing market with great potential, very different customers with an appetite for diversification outside its borders, and financial needs for retirement," says Del Campo during the first interview with the media for the advance of their plans in LatAm. The management company, which is increasingly aware of the need for international expansion, enters into the only greater geographic region, outside Africa, in which it did not have a presence, because their business is growing as much in the US as it is in Asia and Europe.
After studying the market for over two years, they finalized their plans late last year and are now already being implemented, with three key slogans: A long-term strategy, based on offering services for building lasting portfolios and target both institutional clients and distribution in the offshore world.
“Natixis Global AM’s philosophy of growth of is based on creating long term relationships, growing with the clients, and adding value, becoming their partners. We have no quantitative objectives in terms of volume but we intend to grow gradually to become one of the leading suppliers of these markets in line with the group's philosophy”, he explains. Unlike Spain, the Latino market is not as saturated in terms of supply, and although there are challenges cropping up, such as competing with large, US management companies which are very popular in the region, Del Campo is optimistic, since she believes in the institution’s capacity to provide that added value and complementary and differentiated services based on a "multi-manager" business model, with a diverse and global supply and, rather than selling products, it aims to provide investment solutions through its portfolio construction services. “Simply selling funds would limit the value of the group. We are not only a seller of funds, we go much further", she says.
In fact, this is the second key point of their proposal: "The motto is to help customers build lasting portfolios. The crisis has taught us the dangers of volatility and high correlations of assets and clients need to manage risks", she explains. The management company has a center, Portfolio Research & Consulting Group, which offers research of portfolios in which they analyze, free of charge, and totally independently, the best combination of products for every client, whether funded by the Management Company or third parties. In LatAm, where each market has its own peculiarities, they will provide personalized service, "and not a ready-made fund package."
Ambition in Hispanic Latin America
The aim is to reach Spanish-speaking Latin America, and all types of investors, both institutional and private banking distribution, during the first phase, leaving Brazil for a second time. In Mexico, the business will focus on institutions, since the Afores provide the opportunity, for which they are already designing portfolios. "The first focus is on pension funds but, according to the regulation, we will reach more market segments gradually". Giordano, head of business and previously from Schroders, has extensive experience in institutional business.
In Colombia’s case, an office which could be opening sometime next year, and a market from which they will also cover Peru and Panama, there is a greater mix of clients, as in Peru, while in Uruguay (an office which they plan will be ready for opening anytime from the end of the year to early 2015) the focus is on large private banks and third party funds. Even in Chile, where more than just accessing often opportunistic pension funds, the core of their strategy is also based on growing with the fund managers and private bankers, facing their commitment to building a sustainable and lasting business. From here the expansion could reach more countries in the future, says Del Campo.
A Local and Global Team
To reach this market, Del Campo shall coordinate from Madrid all local commercial teams from Latin America (Mexico's, and the future ones of Colombia and Uruguay) and US Offshore, where Ed Farrington is co-head for the Offshore market, also counting on marketing support, compliance and operations with the overall infrastructure of the group. Rodrigo Nunez Aguilar, director of Global Key Accounts for Latin America and the US offshore, will provide support from New York, as will the teams in Miami and Boston. All of it, in order to serve the region in a coordinated manner, and very important, for example, to plan the steps to be taken according to the regulatory characteristics of the various markets.
As for their Luxembourg funds, they are operating in international platforms and currently there are no local records, but that's a topic that depends on each market. Nevertheless, Del Campo assures that investors feel very comfortable with the UCITS brand because they seek the security offered by regulated products. Among her market preferences, and considering a tendency to a more risky character regarding local assets, she highlights both US and European equities and emerging fixed income. In these assets she highlights the offer which can be provided by management companies within the group, such as Loomis Sayles (expert in fixed and emerging market debt) or Harris Associates (US Equities).
Growth in their DNA
Natixis Global AM’s Latin expansion arrives at a time in which their assets globally are close to a trillion dollars, as currently it has 960 billion, and when it has already secured a place amongst the top 15 management groups worldwide, according to the Cerulli ranking. In recent years, while its competitors closed down offices, the company invested heavily, opening in markets like Spain and, since the year 2000, has hired 13 new sales managers. This strategy has allowed it to double its business during the past three years. Also, instead of investing in marketing in recent years, the Management Company has invested to enhance the group’s capabilities of analysis and research for building lasting portfolios.
In the US, it accumulates ten and a half consecutive years of positive inflows in its affiliated management companies in the country, whose assets have grown from 131 billion to 453 billion in 14 years.