Christian, where are your main markets?
CP: We are a European asset manager, so France and the rest of Europe.
Next to Paris, we have five investment centres – Tokyo, London, the US, Singapore and Hong Kong – so that our fund managers are based locally.
We also have some fund managers in Malaysia but they are under the remit of Singapore.
We have been active over many years in the southern part of Europe, and now we’re adding Holland and Scandinavia.
We have also been in Germany, Switzerland, Belgium and Luxembourg for many years, with teams of two or three people.
Next to that we have developments in Asia, which started taking off last year after the teams were put in place a couple of years ago.
We were knocking on doors and explaining who Amundi is and what it is we have on offer, getting some brand recognition and some funds on the platform.
That takes a while, and now you can see there are some positive results out of all these activities in Singapore and Hong Kong.
We have around 60 people in distribution, 35 more or less in Europe, and then about 15-20 in Asia, and a few people in the Middle East, Latin America and US offshore.
Amundi’s entire fund range across the world is over €800bn ($1.1trn).
ETFs are more than €13bn globally, positioning Amundi as a top five ETF provider in the European landscape.
Where is the business growing in different parts of the world?
CP: It is growing on every side. Amundi is not a company which has 40 years on the market. It was formed in 2010 by combining the asset management expertise of two major banking groups, Crédit Agricole and Société Générale, which have brand recognition, which we need to rebuild, and we are doing that at the moment.
We talk about being in the top 10 globally, and our role is to make sure that when people select funds, they include Amundi as a top 10player, which is not the case yet. That is our challenge.
To make sure, not only in AUMs of about €800bn, that people perceive us as the big player we are.
And also that on the ground, people know us by name alongside the other big players.
We have a bit of catching up to do, but we are a fair challenger in the market with the product range we have and with the people we have.
In some parts of Europe, we’ve already done it, ticked the box.
We started in Holland 18 months ago and got an office in Amsterdam. Before that it was done out of Belgium.
That is a market where people on the street definitely do not know who Amundi is, and the same is true here in the UK.
Earlier this year you cut prices on your emerging markets ETF range. How is that pricing strategy working out?
CP: It worked out positively as we have seen more flows than before since the pricing change, so definitely the ETF pricing is playing an important role.
Jerry Devlin: In the UK we did take some business in emerging market ETFs from distributors we hadn’t had before.
The other thing I would say is the minute you move the price in the UK you see competitors react.
I can’t speak about the rest of the world.
At the moment we are attracting attention but you’re never ahead for too long when it comes to pricing.
We are seeing a trend where, for example, Dutch clients have told us in the last year their use of ETF index-type solutions has gone up from a quarter to a third of their AUMs.
There is more demand for ETF or index-type solutions.
More generally, which products are doing well at the moment?
CP: Products which are more into solutions.
We are in a world where clients don’t want to lose money any more, so either they stay in cash or in standard fixed income, and we all know these are not the right solutions.
We have seen this year, and last year as well, flows into a global fixed income solution we offer. We say, ‘Fine, we will manage your fixed income problem.’
It is not a guaranteed return fund, but it does invest in fixed income globally, anywhere with the fund manager making all the right decisions.
The other fund we have been seeing a lot of flow into is the First Eagle Amundi International Fund, which is a global equity/asset allocation type fund, which can go into cash, gold, and also into global equity.
First Eagle is the asset management company which manages the fund for us out of New York and we are selling their product ex-US for them.
People buy this solution once, and leave the money, quite often, in that one particular product.
This kind of solution will be much more in demand in the next five to 10 years.
How has this translated into sales over the past year and looking forward?
CP: We have doubled our net sales to the end of June 2014. Do I see more potential there? Oh definitely, and for various reasons.
First of all the products we have on offer are solution-driven products, which I think are going to be much more in demand than just a plain vanilla US equity fund.
And if and when your performance is not working, or if and when the market is changing, you quite often lose those assets.
An asset allocation solution or global fixed income solution will stay there for a much longer period.
For us, the focus is more on the solution, wealth preservation type products.
We have to play with the global distributors, about 25 of them.
We are a global player too, in many countries, and locally, with people on the ground.
We strongly believe if you want to deal with the client locally you need to have local people, so a Brit in the UK, a Dutch person in Holland, a Singaporean in Singapore, a Malaysian in Malaysia – that’s what we do.
Being local on the ground in nine or 10 places in Asia already, with local offices, helps us service those clients, but quite often the fund selection is done in a central place in New York, London or somewhere else in the world.
What are the different types of products being sold in those different regions?
CP: A private bank client who, 10 to 15 years ago, chose his own bonds and stocks for his portfolio, is now buying funds and is happy with having us allocate a product into his portfolio.
Twenty years ago, or even 10 years ago, a private banker would never have offered it to his clients so the world is changing.
Take Japan as an example, where investors look for opportunities where they can generate an income with perhaps a 4% or 5% payout on it every year in a different currency in order to leverage their investment.
Slowly we’ll see it also coming into Europe, as the population is ageing.
Italy is asking for income type products, and also Hong Kong, Singapore, China and all other Asian populations where the demographic issue is heading towards us.
On our Hong Kong platform, we have a range of products with a bias towards Asian markets, with the prospect of this going across the hubs of Singapore, Malaysia, and Thailand when the new Singaporean passport starts in 2015.
What’s your take on the UK pension reforms and the alternatives to annuity products?
CP: That is a very big question and I could talk for hours about it.
If you take Japan again as an example, they are already running ahead of us at the moment as they have an ageing population and a lot of savings.
They are quite happy to invest in a product which eats up their capital, as long as they get a frequent income out of it, and if in certain times the market is doing differently, it is okay for them to lose a bit of their NAV.
For them it is about the income.
Of course they want to keep as much capital as they can, but it’s not the main purpose of the investment.
I think that will happen in 20 to 30 years’ time in Europe, Singapore, Hong Kong and China.
In the next 10 to 15 years more than 50% of the population will be older than 50 years of age in these countries.
This is happening in Europe so we need to create products which are different and adjust the playing field of investment.
