This quarter in Distribution, we discuss regional trends, the need for producers, gender diversity and alternatives.
Sales teams in 2019 have been more strategically focused than ever. Many firms have taken a pragmatic approach to sales strategy, with sales heads opting to deploy resource in markets where they anticipate short-term success.
These decisions have been catalysed by either product demand, or historic regional traction. For example, some houses with successful fixed income strategies have been increasing their presence in Germany given demand across public and private debt.
International firms are showing keen interest in Asia, however hiring increases are also evident in the EMEA region, namely Germany & Austria, Southern Europe – in particular Italy – and the Nordics.
Conversely, whilst overall hiring has remained consistent in the UK & Ireland and Switzerland, overall market share for these regions has fallen.
A Focus on Institutions
Whilst established players prioritised wholesale and retail channel expansion in 2018, we are now seeing a shift back towards institutional clients.
Within this space, many sales teams in asset management continue to contend with ever-increasing fee pressure, so it is unsurprising that there has been a focus on customised solutions and winning segregated business within the institutional channel to justify higher commercial terms.
Player Coaches and the need for “Producers”
There continues to be a focus on hiring sales professionals that will contribute to the bottom line.
Head of sales and sales professionals comprise 75% of all hires year-to-date. Generally, these are not managerial roles and prioritise actively marketing and winning business. Many sales heads continue to be hired with the expectation they produce results first and grow the team later.
Broader team functions such as client directors, consultant relations and marketing make up 25% of hiring.
Brexit planning rumbles on in EMEA…
Senior executives continue to focus on continuity of service to clients irrespective of any Brexit outcome.
From an operational perspective, most firms have fulfilled regulatory and legal requirements, however heads of distribution are now increasingly conscious of maintaining deep relationships with Continental clients.
As a result, we have seen the location of EMEA sales hires shift away from London, which was traditionally the default for international players.
Increasingly, local offices have opened or expanded in Denmark, the Netherlands, Germany, Switzerland, Italy and Spain.
Conversely, an increasing number of salespeople are covering EMEA clients from the US or the Far East rather than committing to local infrastructure.
Failing to achieve Gender Diversity
Asset managers continue their endeavour to attract and retain more female staff, but year-to-date numbers suggest they are falling short this year.
In distribution, females comprised 25% of total hiring in 2019, versus an incumbent industry average of 36% on current distribution teams.
Initiatives supporting gender diversity are client specific, but common approaches range from requesting all female short lists, through to fast-tracking high-quality female candidates when they display interest.
Technical Breadth and the need for Depth
Mainstream asset managers continue to build strategies and capabilities to ensure they can offer solutions across both public and private markets. This has been achieved through either acquisition or organic growth.
One major headache this strategy presents is how distribution teams transition from selling traditional products to selling more complex products. Teams need to be able to understand the latter and sell to clients but crucially must be able to project manage private market platforms.