Today Candriam is not known as the former Dexia Asset Management anymore. The reference was made by Candriam’s chief executive officer Naïm Abou-Jaoudé (pictured) during his opening speech of the firm’s first European media seminar on 28-29 November 2016 in Brussels.
In two years, the manager, which celebrates its 20 years and is part of New York Life Investment Management (NYLIM), has mostly achieved to leave its past behind.
It has gained recognition by boosting the development of its historical expertises that include among others alternatives & absolute return, SRI and emerging market debt. Candriam has been ranked within various top 10s of European dynamic and fast growing asset managers during the last couple of years.
Where does the firm stand today? As of end of September 2016, Candriam managed €100.1bn in assets, having increased AUM by 45% since corporate rebranding in January 2014, mainly supported by net new inflows (+€23bn).
Candriam, meaning Conviction and Responsibility in Asset Management, had some 21% of its AUM invested in SRI strategies as of last September. Assets in asset allocation and fixed income funds represented 45% and 33% respectively while 14% of assets were in equities and 8% in absolute return strategies.
Institutional clients’ assets accounted for 54% of the firm’s AUM, financial distributors for 36% and high-net-worth-individuals for 10%.
Candriam’s CEO depicted forthcoming challenges and headwinds for the asset management industry among which remain political risks, slower growth due to demographics and structural changes, passive investments growing, margins narrowing, consolidation increasing and digitalisation.
Abou-Jaoudé said Candriam was well positioned to address these issues. Hence, the firm can now see the bigger picture and its CEO has announced a series of developments aiming to support its further growth.
Organic and external growth
Firstly, Candriam is set to look into the passive space. As the ETF market is already well furnished and extremely concentrated in Europe, the Brussels-headquartered company may develop niche ETFs together with alternative ETF provider IndexIQ, fully held by New York Life Investment Management.
Also a selection of NYLIM boutique products will be distributed on Candriam’s European platform.
Regarding the manager’s distribution plans, the path is marked. Expanding its market share with third party distributors, growing pension funds and insurers franchise across Europe and rising business with consultants have been some of the targets set by Candriam.
The company intends to pursue the movement it engaged towards local independent financial advisers. After Italian promotore and French CGP, Candriam will enter the German IFAs market by mid-2017.
But the firm does not only focus on organic growth. It remains attentive to opportunities for external growth.
“We seek complementarity in terms of clients, expertises and corporation culture,” explained CEO Naïm Abou-Jaoudé.
A number of asset classes fit Candriam’s boss’ description such as private equity, loans, real estate or infrastructure. A potential purchase could likely be a European boutique or perhaps an Asian manager as Candriam will push for more distribution in the Asia-Pacific region.
It will continue to build its presence in the Japanese and Korean markets it entered through NYLIM and keeps an eye on the Chinese market even though the strategy to enter has not been defined yet.
Candriam will as well bolster its operations in the countries of the Gulf Cooperation Council after its licence has been upgraded by the Dubai Financial Services Authority to arrange and advise investments for itself and the subsidiaries of New York Life Investment Management in January 2016.
In Latin America, Candriam has struck cooperation agreement with third party distribution companies and focuses on institutional clients.
Digital and SRI funds to be launched
Another stone to the manager’s further growth will be the development of robo-advisory services and the enhancement of the web client experience amid digitalisation of the asset management industry.
This last trend will also be played through the launch of new funds as Candriam is set to launch an equity strategy focused on robotics and innovative technology in December, the firm’s head of Thematic Equities Rudi Van den Eynde has announced.
Also a long/short equity fund exposed to the digital trend and managed by Cesar Zeitouni, recently appointed head of Long Short Equity at Candriam, will follow.
As for the fixed income segment, Candriam has just soft-launched the Candriam SRI-Bond Emerging Markets fund in November, which will be further marketed across Europe. An SRI global high yield bond strategy is currently being developed and will be launched by mid-2017.