Blanqué spells out the firm’s key strategies to enhance presence in Asian segment, right from unveiling of its operations in Bangkok early next year, rolling out of new products, and also ‘possible’ acquisitions to bolster the fixed income business.
The French giant that has nearly one-third its total assets already in distribution space, has a “strong ambition” to build its external distribution business, partnering with key institutions in the Asian landscape, said Blanqué in an interview to International adviser,.
"Our strong ambition is to develop the external distribution business and we want to become one of the key partners of the biggest institutions across the region. We want to build on our distribution.”
"We are strong at servicing our distribution network and we want to basically leverage on that and export it across Asia. We have been adding resources in terms of coverage of this segment.”
Blanqué has been the global CIO and also head of institutional investors and third party distributors at Amundi, which was formerly known as Credit Agricole Asset Management, since February 2005. From 2000-2005, he was head of economic research and chief economist at Credit Agricole. He was also a deputy director of the economics research department at Paribas and a strategist at Paribas Asset Management. He began his career in institutional and private asset management at Paribas in 1991.
Asian ambition
According to Blanqué, Asia where the firm is managing close to $100bn is the "second big market" for Amundi after Europe. In Japan, the firm is "one of the biggest non-resident players”, with assets close to $25bn in institutional and distribution space.
Apart from Hong Kong, Singapore, Amundi is present in Shanghai, Taipei, Kaula Lumpur, Brunei, and Sydney and it also has joint ventures in Mumbai, Shanghai, and Seoul.
“In terms of expansion into new countries, we will see. We will be announcing, in beginning of next year, the opening in Bangkok,” Blanqué said. However, the firm did not wish to disclose the details as it is in the process of seeking regulatory approvals.
Apart from organic route, the deputy CEO also suggested exploring acquisitions.
"On a very focussed basis, we may be interested in acquiring fixed income players in the region. It is part of our plans to seize the opportunity, if it is there, so as to grow our fixed income presence. "
“In terms of ambition, we wish to basically conform and deepen the status we already have with key big institutions across Asia. Second, is to be recognised as a reference player in the distribution space, and third generally speaking become one of the leading global firms in Asia."
“The basic message (we leave) behind is we got an approach in terms of Asean and Southeast Asia and Singapore is a hub."
.
Products pipeline
Amundi announced the registration of its flagship fund, Amundi International SICAV, in Singapore in July, which is "attracting good response."
“We are gaining momentum now in terms of servicing distributors throughout the value chain. We are pretty much optimistic on that side.”
Going forward, in 2014, the firm has plans to roll out two more of its flagship schemes– Amundi Funds Bond Global Aggregate and Amundi Funds Bond Asian Local Debt, one of which may be floated during January-June.
Blanqué refers the global bond aggregate fund as a serious competitor to Templeton or Pimco global bond funds.
"It is a agnostic fund, (it has) no particular bias towards any bond segments. It is a real global bond."
On the institutional side of asset management, Amundi has "answer to every need of the institution" with its broad range of products and strategies.
When queried on any more fund launches for the retail segment, he said, "We want to be focused. We don’t want to basically embark into penny zapping. I have mentioned three areas of products and it all about three areas.”
"We got potentially other products, we may bring to the market. But, the recipe of success is basically focus. We will stick to the policy we mentioned (the three products).”
UK Distribution
Amundi has two ambitions in the UK market. "One is we are clearly a challenger and want to establish presence in pension funds segment and distribution space focussing on the big distributors, be big private banks. For this, we have made some significant investments on the corporate side."
.
Market outlook
In terms of global market outlook, Amundi favours some of the developed markets like Europe and Japan, where it has overweight positions, but is neutral on emerging markets and tend to be slightly underweight US.
"We do expect diversification outside the US and Asia because of fiscal cliff and valuations. We think it is too soon to come back into emerging markets as a whole”
According to the global CIO, investors are "remapping the emerging markets universe" and taking into factors such as basis of fundamentals, distinguishing between countries with bad current account dynamics, under or overvaluation of currencies, structural exposure to commodity cycle, and trying to discriminate between various groups.
"We are cautious where the criteria are not reassuring. Typically South Africa, Turkey, to an extent India and Indonesia in terms of current account dynamics. Brazil is sitting in between exhibiting the current account dynamics problems, but at the same time has some strengths. We are neutral Asia. We are neutral Southeast Asia."
In Asian segment, Amundi is overweight "only" China as it believes the country is heading "in the right direction" following the reform announcement and market appears relatively attractive.
Blanqué is of firm belief that fears of Fed tapering, if any are overdone.
"We do not expect Fed to normalise, as is feared in the market, meaning there is some potential for appreciation of the market at some point down the road."
In terms of sectors across Asia, Amundi favour technology and export-led companies since the asset manager feels the additional growth would come from developed countries, "which is for the first time in decade."
Specifically in China, Amundi is bullish on energy, portals, telecommunication, and "some banks."
"We are more export-led, more cyclical than others. We don’t favour internal demand in the medium-term. Internal demand is structural."
Europe: "Sleeping beauty ready to awaken”
"Europe is a sleeping beauty waiting to be awakened, and we have already started diversifying, ” said Blanqué whose optimism on the region comes against the backdrop of global market happenings.
"We spent six-to-seven years with portfolio very much concentrated in US and emerging markets. US assets are challenged by valuations now and fiscal cliff. Emerging market is in phase of remapping. So, this is the relative reason to start looking at Europe."
"I think the systemic risk is behind us. We are enjoying cyclical recovery, modest but it makes a change. There is a backing of the central bank. We do expect the ECB to do more. "
According to him, Europe appears attractive also in terms of valuations, dividend yields, profits momentum, and M&A dynamics.
"Profits are expected in the region of 8-10%. It is a catching up process. European profits are only at 67% of the level reached in 2007. In the US, they are 135%. So, you got to think about it."
Amundi is biased towards cyclicals in Europe, which are "arguably the cheapest." And, also expects small- and mid-cap to outperform bigs "but at a risk as they are more exposed to European national cycle."
"The view on financial sector in Europe was very pessimistic. The reason we were favouring financials is also a part of catching up process. This is all about the sleeping beauty to be awakened."
Investor Advise
"In terms of the products, the general trend I see from my window is a shift from national to global. A shift from benchmark to absolute return target funds, multi-asset will be in demand. Asian culture is more of multi-asset than any other parts of the world. (I see a shift) from product to outcome-driven investment solutions,” said Blanqué who has his own money invested in some of Amundi products.
