Goldman Sachs expects Europe’s asset management industry to seek M&A that strengthens their access to the banking channels that dominate the Asian distribution.
Given their experience navigating the European landscape, European asset management groups tend to have a comparatively strong proposition when domestic Asian banks are looking for asset management groups with which to partner, Goldman Sachs’ equity research team states in a report dated 26 September.
“Unlike European partnerships (which often involve an acquisition of the bank’s existing asset management operations at the same time as a distribution agreement is signed), Asian deals have tended to be structured as joint ventures. The European asset manager invariably provides the investment expertise and often runs the division, while the bank grants the vehicle preferential access to its customers,” the report on European asset managers reads.
According to Goldman Sachs, Schroders and Amundi have successfully accessed this opportunity.
The two groups have been “particularly successful” in establishing distribution relationships in the region. Goldman Sachs estimates that Schroders and Amundi both manage AUM of about €58bn in their joint ventures. This represents about 14% and 5% of their total AUM respectively.
Distribution of retail funds in Asia is currently dominated by local banking and insurance groups. To varying degrees, these groups operate “captive” distribution structures that favour in-house products, or re-branded products from a small number of third-party providers.