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Royal London Asset Management, the funds division of the UK’s largest mutually owned pension and investment company, has its sights set on growing its international footprint, with plans to target key continental European markets and bolster an existing presence in Asia.
“We wanted to go to Europe in 2016,” Piers Hillier, chief investment officer at RLAM told Financial News.
“The Brexit referendum surprised many of us. We had to take a pause and say ‘is that the right thing to do at that particular time?’ We’ve come back and looked not just at the European strategy, but more broadly.”
Hillier, who joined RLAM in 2015 from Kames Capital, pointed to “demand beyond the UK” for its capabilities, adding the asset manager was about to make its first-ever hire in Germany.
Switzerland and Scandinavia are also markets of interest, he added.
RLAM last year appointed Dublin-based FundRock as a third party to provide management company services for its Irish fund range — essentially providing it with a presence in Ireland — and to assist with distribution across the EU.
“We will look to do more [in Europe], either via partnerships with local players or across more markets depending on commercial success,” said Hillier.
“The interest we’re getting from Europe suggests you’ll see more from us in the next 12 to 24 months.”
READ LGIM to open Singapore office as international push continues
Since putting its international expansion plans on hold following Brexit, the £153bn asset manager has bolstered several of its flagship investment capabilities and added headcount. This included the hires of Peter Rutter, William Kenney and James Clarke in January 2017 from Waverton Investment Management to build its global equities offering.
Global equities has been a standout area for RLAM. In September, the asset manager announced it would limit access to its £868m Global Equity Select fund following a period of strong inflows.
The fund, which includes Microsoft, Amazon and Apple among its top 10 holdings, has returned 112.3% over the past five years, compared with 45.2% for the IA Global sector.
Meanwhile, last month RLAM announced it had poached William Nicoll from M&G to lead its foray into private markets — one of the fastest growing segments of the asset management industry.
Beyond Europe, Hillier said RLAM has raised more than £5bn with a distribution partner in Australia over the past six years.
“It gave us the confidence that if we could do that with a distribution partner, why wouldn’t we go elsewhere?,” said Hillier.
The asset manager has also been spurred to consider international expansion following a mandate win from the Japanese government pension fund earlier this year.
“There is logic looking at Asia in light of what we have in Australia and Japan,” Hillier said.
RLAM is not the only asset manager that is eyeing business wins outside the UK.
Michelle Scrimgeour, the chief executive of Legal & General Investment Management, has made international expansion one of her top priorities.
The £1.2tn firm grew its European business last year when it opened a Zurich office and hired Mauro Gerli to oversee a push into Switzerland.
It also recently opened an office in Singapore as part of a drive to expand its footprint in Asia.
Although LGIM has a dominant position as the UK’s largest fund group, 37% of its assets under management originate from its international business.
To contact the author of this story with feedback or news, email David Ricketts
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