Lyxor, the asset manager owned by Societe Generale, has outlined a new organisational structure, which consists of three business lines: ETFs & Indexing, Absolute Return & Solutions, and Alternatives & Multi-Management.
The change is part of a strategic plan that will see Lyxor aim to grow assets by 50% by the end of 2018. Current AUM is reported as €96bn.
In the area of ETFs, the provider expects to grow assets by 15% annually over the next five years – or by half again over the pace of the wider ETF industry, which is predicted to grow assets by 10% annually through the period.
Driving this change will be a focus on sales in Europe and Asia, along with growing the so-called Smart Beta solutions being developed as a way to bridge the passive and active fund universes.
The Absolute Return & Solutions business line already has come €9bn under management in active strategies. And it manages €15bn in customised solutions.
Lyxor claims some €25bn in alternative and multi-management assets, and the new Alternatives & Multi-Management business line is set to leverage the presence of some 30 fund research professionals along with tailoring distribution and developing strategic partnerships to boost the business.
Lionel Paquin, CEO of Lyxor Asset Management, said the new organisational structure was required to meet investor demands in a world where the old paradigms of investing – a simple core mix of bonds and equities – was gone.
“Bond/equity, core/satellite, this is over,” he said.
Investors have realised that bonds and equities can correlate and that they need to look across factors, across risks in order to ensure they do better in the ongoing investment environment.
Investors are also being affected by regulatory developments, which have made financial services seem regulated in the same way that aircraft makers or pharmaceutical companies are, Paquin said. For example, this means that insurers have been coming to Lyxor looking for solutions for handling Solvency II requirements, while banks are looking for ways to handle Basel III, he added.
Alongside the new business lines, Lyxor is also seeking to redefine its “customer centric” approach, ensuring that it listens to customers looking for solutions to investment needs rather than focus just on products.