The driving force behind the growth of Natixis Global Asset Management (AM), the $719bn (€527bn) multi-boutique firm headquartered in Paris and Boston, is its powerful distribution machine, Natixis Global Associates.
The current structure of Natixis Global AM, part of Natixis bank, started to take shape more than a decade ago, when the French asset management company, then named CDC Gestion, acquired Nvest, a US holding company, comprised of 11 asset management firms. Loomis Sayles, the largest asset manager, was the main objective of the acquisition.
Today, Natixis Global AM can rely on the expertise of more than 20 independent investment managers, or affiliates, mainly based in the US. “We thought at the time, and we still do, that the best practices in our industry come from the United States – you learn a lot from US portfolio managers, and how they run their business” says Hervé Guinamant, president and chief executive officer of Natixis Global Associates International, at the time a member of the committee responsible for the acquisition.
The main objective of the international platform, which services and distributes $38bn in total assets and counts on 50 sales staff, is to help affiliates to grow around the world. This excludes the US market, which is served by a dedicated sister platform, and the French market, where Natixis Asset Management, the largest company of the multi-boutique firm, channels the group’s products through the two proprietary bank’s networks, Banques Populaires and Caisses d’Epargne, as well as third-parties.
Specific needs
“At Natixis Global Associates, we simply facilitate our clients to navigate through this vast product offering, helping them select the best solution for their specific investment needs, and the model has proved to be winning in challenging market conditions of the past couple of years,” says Mr Guinamant.
Twice a year, and on an ongoing basis, the sales team together with the affiliates and the centralised product management team in London, select a range of 20 strategies out of the 200 plus solutions available in the group, as best suits the environment. The idea is to avoid the “catalogue type” of approach, but focus on client needs.
“We spend a lot of time and have an open discussion with the different asset management companies. We listen to them, and advise them on what it makes sense to promote in this part of the world. We provide market data, feedback from the ground and a clear view of what we think it makes sense for today, and more importantly, for tomorrow.
“We have been very successful with this approach, thanks to our long-term relationships with key clients and an on-going dialogue on an international basis,” he says.
But it is not all plain sailing. There are frustrations to manage from time to time, as all boutiques think “their products are the best in the world,” says Mr Guinamant.
There is not much overlap of products within the group, but the affiliates do compete with each other. In the US equity space it has happened that Natixis Global Associates puts forward different proposals on behalf of different affiliates. “We don’t do this systematically, we try to understand the demand, the risk appetite and the volatility that the client is ready to accept and look at what fits best.”
Appropriate strategies
It is important to do your homework, emphasises Mr Guinamant, to identify the stories that are appropriate to the different client segments, listen to their needs and come up with a shortlist of best strategies. The idea is to sell one product today, to be able to propose another one tomorrow.
“It is not a very aggressive sale, it is really trying to be a partner with a client,” he says. “In this type of model, the main challenges are communication and management, to make sure that all the guys on the ground are doing what we decided all together, with the affiliates, the sales force and the centralised team in London.”
Trust, professionalism, and transparency are the necessary ingredients that ensure harmony in a multi-boutique model. Road-shows are organised for portfolio managers that want to see for themselves whether their products might work or not. The CEO summit, headed by Pierre Servant, CEO of Natixis Global AM, gathers all the affiliate CEOs once a year, to discuss future strategies. Introduced four years ago, this initiative is helping to create a good climate in the group.
With 11 different locations around the world and 20 different affiliates, it is key to plan a very clear strategy, he says. “We are much more proactive and reactive that the others.” This flexibility also applies to potential acquisitions, which can happen very quickly.
In October Natixis Global AM acquired a majority stake in specialty ETF start-up Ossiam, based in Paris, and added a new boutique, by founding a global macro alternative manager, H2O, in London, with a team of people previously running the value at risk (Var) range of products for Amundi.
