Weekly Fund Distribution Notes – 25 March 2025
8th April 2025
Again, plenty of fund selector and mandate news this week. Fund selector risks in seeding. More on FOMO and the usual buy and sell-side misconceptions. Just because everybody talks the same talk, it doesn’t mean that it is true or a good idea. Often, it isn’t.
Let’s kick off with fund selector news. Indosuez WM has appointed Stavya Epstein as head of the tailor-made multi-asset management team. In addition to her new role, she will continue to be part of the fund selection team, which consists of 21 analysts. Up in the north, Sweden’s government has renewed the appointments of three key board members – Maria Rydbeck, Katarina Staaf and Anna Nilsdotter – at the Swedish Fund Selection Agency (FTN).
Citywire Selector also featured an interview with Bank of Ireland’s selection head Evelyn Ryder. Although investment advice goes to the full BoI book worth EUR 235 billion in assets, Ryder and her team mainly oversee EUR 3 billion in multi-manager, multi-asset portfolios across a range of active external managers. The interview covers a broad range of topics, such as selection processes, ETFs and AETFs, but also seeding. While many fund buyers shy away from seeding, Ryder and her team are often willing to step in as early backers. However, seeding requires a lot of conviction. Not only in investment strategy terms, but also in terms of fast AuM growth. Nobody wants to seed a fund which starves on its way. See link section below.
In terms of mandates, Nordea and Oddo BHF AM have been appointed by the French public sector pension fund Ircantec to run a EUR 800 million ESG / decarbonisation-focused global equity mandate. Nordea also sealed its first Swiss deal as part of a new partnership model for its BetaPlus product line and a first EUR 100 million investment with an unnamed cantonal bank. In the UK, LGPS, the pool of 11 UK local government pension schemes (see also last week’s newsletter) awarded Arcmont AM (Nuveen owned) and Golub Capital two senior secured direct lending mandates worth a combined EUR 419 million. Speaking of Nuveen’s Arcmont, the former also secured EUR 475 million in two mandates from parent TIAA and the Dutch pension manager APG. Also, the investment solutions unit of Schroders has won a EUR 885 million fiduciary mandate by the Aga Rangemaster Group Pension Scheme.
Change of scene. Just because everybody talks the same talk, it doesn’t mean that it is true or a good idea. This also applies to asset management and European fund distribution – to a degree which keeps puzzling me. It seems too many people are just too busy, or taking false comfort in talking everybody’s talk. Too many distribution leaders and senior decision makers take talk or headline figures at face value, without a really deep understanding of associated risks and opportunities, outliers, drivers and asset origins behind. Not to speak of what it means and takes in terms of distribution strategies.
In this context, the active ETF (AETF) launch activity and talk continue unabated. Ignites Europe hosted an interesting webinar on the European case for AETFs. Unsurprisingly, providers remain bullish, denying any FOMO (fear of missing out), but Kenneth Lamont, principal of manager research at Morningstar, stated “I do not sense the demand. Investors are not banging on the doors of asset managers asking for a slightly diluted version of what they can buy elsewhere. I think this is mostly driven by asset managers.”
Remember the quote from Vanguard’s head of fixed income product for Europe, Kelly Gemmell, featured in the penultimate newsletter? “We acknowledge the growing interest in active ETFs but client demand in Europe hasn’t reached a critical mass … much of the active ETF buzz is amplified by asset managers, who get attracted to the noise and want to be part of it.” A lot of our peers’ research – no offence – seems rather driven to please client dreams, rather than providing – not only opinion but also hard evidence driven – food for thought and a sound base for critical strategic decision making.
Last but not least, the March edition of the Rankia Pro Europe magazine features a recap on 2024 European fund flows – beyond the obvious, typical headline talk – and why it is the most exciting time in my 31Y career in the asset management sector. Let’s talk if you would like to discuss the “why” in more detail.
