The intention is obvious – to capture the upside when things are going well and reduce the downside when they are not.
If May is anything to go by, fund management firms are putting this same theory into practice with a huge increase in geographical diversification of fund ranges. And thankfully many are able to distinguish between the poor state of some of these countries’ and regions’ economies and concentrate on their market potential.
European growth
Some are fairly straightforward examples, with the most recent being the addition of a euro share class to Barry Norris’ £361m Ignis Argonaut European Alpha Fund. It already invests in Europe ex UK and the mere addition of a euro share class expands its reach to an entire continent’s clients. It is already registered for sale in Austria and Germany and registration Norris is currently looking to include registration in France, Italy, Spain and Switzerland.
Earlier this month, Threadneedle registered 26 of its Sicav funds in Sweden just about a year after expanding its European capabilities with the recruitment of Dominik Kremer as head of European distribution.
In April, the firm signed an agreement with Banca Generali for the Italian bank to include Threadneedle’s new Global Themes Fund on its multi-manager platform; in the same month it agreed a deal for 34 of its fund to be distributed in Italy through Deutsche Bank.
Asian expansion
The picture is the same in Asia.
Julius Baer is the first private bank to be granted a QF11 licence by the China Banking Regulatory Commission in December last year, paving the way for it to launch onshore equity and bonds fund that take direct advantage of China’s domestic growth.
GLG is to launch a new currency fund next month that will be domiciled in Japan and aimed at Japanese investors as art of ambitious plans by its parent, Man Group, to move its investment management businesses closer to its markets.
Not to be left behind, law firm Clifford Chance has named 23 new partners in, among other territories, Hong Kong, China and Singapore making it the largest private client firm in Asia.
There are even examples of fund administrators and entire islands (Guernsey) setting up business in Asia or registering on, in this case, the Hong Kong Stock Exchange.
It seems everyone is getting in on the act except UK intermediaries who are more intent on ploughing their own local furrow than expanding abroad. It does seem a crying shame that there are very few outside the private client arms of huge UK banks or fund management firms who are willing to try their arm in an overseas advisory or discretionary market.
Maybe the introduction of the Certified International Wealth Manager qualification from the Hong Kong Securities Institute and the Association of International Wealth Management will help. It is aimed at experienced financial, legal and other professionals in the wealth management industry looking to work on the global stage.
And as the labour market moves East, through Europe and into Asia, so the scope for them to be given advice abroad from an experienced fellow-Brit will grow.
