Categorise the importance of the different regions to the business?
We have always looked at the world at large, broadly, and in particular Europe. On the one hand this is a good thing but it also has risks because you have to prioritise markets. We are too small to just blanket Europe, for example. Our core markets are Switzerland, Germany, France, Italy and, more recently, Spain.
In which European markets are you seeing the most growth?
We are seeing growth everywhere in terms of equity funds in this low-interest environment. We are not necessarily going to focus on a market that is growing the fastest. Globally, we are going to a market where we see we have the biggest edge and the biggest opportunity. Our main market in that sense is Switzerland, which is a very large market.
We also look at margins. The ones ahead of the pack in terms of margin compression are the UK and Holland. Everywhere is competitive but there is a margin compression in varying degrees that comes into our strategy of where to focus. In the French part of Switzerland, we definitely want to intensify our marketing. In the German part, we were doing quite well but not well enough.
After all the hassle, you might think Switzerland is a less appealing prospect but, when you see the recent UBS results, it is quite surprising there is still money coming in despite all the US scandals.
I no longer dare say I am a banker as I am so ashamed of the way the Swiss have behaved. UBS reported a huge inflow of money from Asia to Switzerland. Why do the Asians go to Switzerland? I am sure they will go to other places as well but Switzerland still has this aura of stability.
What presence do you have in the Middle East?
Not very much but we do have strong relationships with sovereign wealth funds and I am actively looking to do something more there. I am talking to somebody who could represent us.
If you want to set up a presence in Abu Dhabi, for example, which I know well, that is a long process. You need to have real volume to start with, so it is a fly-in approach. It is one of the markets we want to be looking at outside of Europe. It would typically be institutional clients, such as a big institution in Saudi Arabia, Abu Dhabi or Dubai.
Highlight a couple of key challenges you face in Asia?
There are a lot of challenges. Nevertheless, I will give you some modest but interesting examples. We actually have some of our funds, such as Europe Value and China Panda, in Thailand. First of all, Thailand has enormous wealth. Second, who would have thought that emerging markets would be interested in European shares?
We are working together with a leading investment bank and we have a local wrapper because they have strict SEC regulations. They have local fund shells that invest in our funds. That shows there is a niche market that can develop.
Another example is in Australia, where we are negotiating with a new company, too. They have an enormous superannuation system that is very little invested outside of Australia, so they want to diversify that.
We spoke this morning to a distributor in Hong Kong who we are going to meet and see if we can find a way to market our funds in Asia. We also have our own company, which is quite substantial and owned by the holding company of the bank. They might potentially distribute our funds but not at the moment.
Another challenge is to sell to a series of clients of ours in Europe in Singapore. Many of the big banks are our clients in the region and we are on their recommended buy lists, so we should really intensify that. That, I would say, is a real opportunity, so plenty of challenges lie ahead.
