Local branches help managers compete in Europe
Establishing roots in target countries is an effective way to gain a competitive edge on investment sales in Europe, according to Cerulli Associates, as investment managers plan to increase sales efforts in Italy, France, Spain, and Germany during 2015.
In order to beat off stiff competition, find Cerulli, managers must be more strategic to sell outside their home market. This has led some asset managers to establish roots in selected countries, to great effect.
The firm pointed to the example of Franklin Templeton that reaped the rewards of setting up branches in Rome, Florence, Milan, and Padua. Net inflows every quarter since have been between €800m ($972m) and €1.5bn, according to Assogestioni.
"This was a shrewd strategy that paid off," said Barbara Wall, Cerulli's Europe research director. "Many foreign managers launched funds in Italy, trying to sell them, either from a distance or by opening a branch in Milan. But sales is a local game and success is more likely if a firm has people on the ground and not just in Milan."Nearly two-thirds of managers polled by the firm said they intend to increase their sales efforts in Italy, compared with only 37% of last year's respondents.
A significant number (43.2%) of managers surveyed plan to target France, against only a one-fifth of managers polled for last year's report. More managers than last year also plan to increase sales efforts in Spain and Germany.
Another significant advantage to having a local presence is that a manager can tailor its message according to regional variations in disposable wealth, attitude to risk, and product choices, for example.
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