This document is solely for the use of professionals and is not for general public distribution.
The value of an investment and the income from it can fall as well as rise and you may not get back
the amount originally invested.
Global Distribution Strategy
May 2014
Investor presentation
Phil Wagstaff
Global Head of Distribution
Today
• 5 year plan
• Changes made and changes ongoing
• People
• Our global business
• The importance of product
• Brand
• The next 3 years
1
My background
• Over 25 years in asset management distribution
• NM Schroder, Henderson, M&G Investments, New Star, Gartmore
• ‘Done the job’
• Build the people and they will build your business
• Joined via Gartmore acquisition
• Why I came back!
2
A combination of art and science
Competitive advantage
Right client
service
Right brand
Right
performance
Right products
Right time
Right
relationships
Right people
Distribution is a combination of art and science;
application of science to the art of relationships
3
Distribution strategy
The 5 year plan
•
Performance, and the perception of performance, is critical to long term success
•
Global Product Development is a key driver
•
We need a brand that conveys the sense of performance
•
A distribution structure based around client types gives a better understanding of
investment objectives, product and service needs
•
Quality of people will determine the quality of success
•
Team work and collaboration critical in a global market
•
Need to build our core franchises
•
We have to back our winners
2 years in, 3 to go
4
Global Institutional net flows
Institutional flows continue to stabilise
197
113
£m
(107)
(423)
(581)
(708)
(747)
(833)
(1,457)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
5
Global Retail net flows
…whilst turn around in Retail is evident
2,875
2,504
1,348
188
£m
399
(46)
(110)
(296)
(792)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
6
Onshore OEIC / Unit Trust Retail net flows
Re-establishing our market position
690
646
4Q13
1Q14
473
154
£m
(159)
(376)
(367)
1Q12
2Q12
(399)
3Q12
(337)
4Q12
1Q13
2Q13
3Q13
7
Offshore SICAV Retail net flows
Record Q1 2014 built off strong performance
1,554
1,114
480
470
307
246
108
£m
(36)
(252)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
8
US Mutuals Retail net flows
Robust Retail flows continuing in 2014
608
609
4Q13
1Q14
398
187
97
£m
5
(16)
(25)
(164)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
9
Global Retail net flows
2,875
2,504
1,348
188
£m
399
(46)
(110)
(296)
(792)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
10
Diversity of flows by fund, strategy and geography
20 Retail funds in FY13 with net flows of £100m+
European Equities
Global Equities
£2,394m
Global Fixed Income
Multi-Asset
712
Alternatives
£917m
100
27
173
£857m
302
£1,491m
73
135
400
410
67
68
356
1,064
600
198
190
18
251
96
1Q13
2Q13
3Q13
419
4Q13
1Q14 continued this momentum: 10 Retail funds with net inflows of £100m+
11
What is Distribution?
25% of Henderson’s staff work in Distribution which sits at the centre of the business
•
Sales
Pre-financial crisis model
Clients
•
•
Marketing communications
Investment communications
Portfolio
Managers
Portfolio
Specialists
Relationship
Managers
Sales
Operations
Loose coordination
•
Client service
•
Product strategy / development
•
Brand
Emerging model
Clients
Portfolio
Portfolio
Managers Specialists
Sales
Relationship
Operations
Managers
Tight coordination
Source: KPMG – Evolving Distribution Models in Asset Management.
12
What have we been doing?
Working as a team to help us better serve our clients
Changed…
•
Our model
•
Our behaviour
•
Compensation
•
Building a global infrastructure
Old model
Institutional
Liquid
Alternatives
Retail
Focus…
•
Increasing and up skilling resources
in core markets
•
Rebranding the business
•
Globalising the product suite
•
Increasing marketing spend
•
Identifying key franchises and ‘run our winners’
•
Centres of excellence
New model
Institutional
Retail
Liquid
Alternatives
13
Developing a truly global distribution model
Distribution
UK
Distribution
North America
66%
11%
AUM¹
AUM¹
39 FTEs
151 FTEs
Europe and
Latin America
19%
AUM¹,²
Distribution
31 FTEs
Asia / Australia
4%
AUM¹
Distribution
23 FTEs
Note: All data as at 31 Dec 2013.
1 Based on total AUM.
2 Includes Middle East and Africa.
14
New people
Head of EMEA
Retail & LatAm
Greg Jones
Head of EMEA
Institutional
Nick Adams
Head of Global
Marketing
Rob Page
Head of
Advisory Sales
Sam Mettrick
CEO of Japan
Business
Shiro Tsubota
Head of Asia
Wholesale
Mabel Chan
Head of
Germany
Daniela Brogt
Head of
Content
Darrel Billingham
Head of
Distribution Australia
Matt Gaden
Head of Corporate
Communications
Angela Warburton
…and more to come
15
Europe & Latin America
Depth and breadth in distribution supported by a strong brand presence
London, Paris, Milan, Amsterdam, Frankfurt, Zurich, Madrid base
Sales
Professionals
Clients
Key Products
UK Retail¹
EMEA
Institutional²
Investment
Trusts
Latin America
Continental
Europe Retail
13
8
3
2
Private investors,
financial advisers,
platforms,
discretionary
wealth managers
Local authority
pension funds,
corporate pension
funds, institutions,
SWFs
Private investors,
financial advisers,
platforms,
discretionary
wealth managers
National pension
funds (AFPs),
banks,
discretionary
wealth managers
Platforms, banks,
insurance
companies,
discretionary
wealth managers
UK Property,
Cautious Managed,
Strategic Bond,
European Special
Sits, Global Equity
Income
Sterling Credit,
Total Return Bond,
Multi Asset Credit
The City of London
Investment Trust,
Bankers
Investment Trust
Absolute Return,
European Equities,
European
long/short
European Equities,
European Credit,
Equities long/short,
Global Equity
Income
17
Note: Clients from the EMEA region are serviced either directly from London or through one of our European offices.
1 Teams: UK Discretionary team, UK Advisory team, JV team (Telesales team 2Q14).
2 Teams: UK Client & Consultant Relationships, Nordics & Netherlands Sales teams.
16
North America
Strong Retail Distribution network
Boston and Chicago base
US Retail
Sales
Professionals
18
US Institutional
3
Clients
Wire houses, wholesale platforms, RIA’s
State pension funds,
corporate pension funds institutions
Key Products
Global Equity Income, European Focus,
International Opportunities
Global Equity, Global Fixed Income
Note: Background reflects current Henderson US distribution territories.
17
Liquid alternatives distribution
London and US base
Sales
Professionals
Clients
Key Products
6 (3 EU, 3 US)
High net worth individuals, family offices, private banks, wealth managers;
Local authority pension funds, corporate pension funds, institutions, SWFs;
Charities and foundations
UK Equity long/short, European Equity long/short, Agriculture,
Global Equity long/short, UK Small Cap long/short
18
Global product governance framework
Global Strategic • Strategic – high-level / long-term
Product Group • Product innovation
•
Life cycle review
Product
Implementation • Execute new product ideas
• Coordinate and prioritise initiatives
Committee
Product and
projects
stakeholder
meetings
•
•
•
Product specification
Stress testing
Pipeline reporting
19
Global product development
Strategic / Global
1. Global Equity
• EAFE & ACWI
2. Global Equity Income
3. Global Fixed Income
• High Yield
• Investment Grade
• Emerging Market Debt
Tactical / Regional
1. Asian Equity
2. Natural Resources
3. Agriculture
4. Liquidity
5. Commodities
4. Unconstrained Bond Funds
5. Global Equity Long Short
20
The winner takes it all
Global flows 2013¹
US mutual flows – Europe stock²
$bn
1,500
$m
3,000
2,500
2,000
1,500
1,000
500
0
1,317
1,000
500
0
-500
2,739
Top 2 funds
738
Top 5
(564)
Remaining 22
funds
-1,000
Top 1%
Remaining 99%
European flows – European ex-UK large-cap equity³
UK Retail flows – IMA Property4
€m
4,000
3,000
2,000
1,000
0
£m
3,000
2,947
Top 5 funds
322
BlackRock
European
Dynamic
334
Henderson
Gartmore Fund
Cont Europe
Fund
396
Threadneedle
Eur Select
Standard Life
Eur Eq Inc Fd
615
BGF
Continental Eur
Flexible
Remaining 149
funds
Top 5 funds
707
JP Morgan
Henderson
Intrepid European European Focus
Fd
Fund
2,511
2,500
1,279
564
738
2,000
1,500
1,000
Top selling fund in
sector 2013
569
500
0
Henderson UK Property
Total sector
¹ Source: Morningstar Direct, Worldwide OE & MM ex FoF ex Feeder Database, as at Dec 2013.
² Source: Morningstar Direct, US OE ex MM ex FoF Database, as at Dec 2013.
³ Source: Morningstar Direct, Europe OE & MM ex FoF ex Feeder Database, as at Dec 2013.
4
Source: IMA EchoWeb, as at Dec 2013.
21
Henderson Horizon Euro Corporate Bond Fund
Henderson Horizon Euro Corporate Bond Fund since inception
2.0 €
40
Henderson Hz Euro Corp Bd Fd
Henderson Hz Euro Corp Bd Fd Performance
1.8 €
35
1.6 €
1.2 €
25
1.0 €
20
0.8 €
15
0.6 €
10
0.4 €
•
Dec-13
Jun-13
Sep-13
Mar-13
Dec-12
Jun-12
Sep-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
0
Jun-10
0.0 €
Mar-10
5
Dec-09
0.2 €
•
The first anniversary of the fund marks the beginning of marketing
activities supporting sales efforts to establish Henderson’s
reputation as a FI fund manager.
30
1.4 €
•
December 2010
Second best performing fund in the sector since
inception
Second best net selling fund in the sector in the
past 2 years
1.68% market share in the Morningstar
EUR Corporate Bond sector
2011 – 2013
With client interest in Credit remaining high, marketing activity
focused heavily on:
• Sponsored events: 12 events across Europe, including high
profile pan-European events
• Major PR focus principally in France, Germany and Italy
• Webcasts (on average every trimester), supported by transcripts
• Frequent webinars on topical issues
• Frequent collateral, such as ‘Fund updates’ and
‘View from the Credit desk’
• Exact target from September 2011
Higher level of marketing activity coincides with rising flows into the
fund.
2014
Marketing activities on this fund scaled back to make use of limited
fund managers’ time on promotion of EHY and GHY fund.
Source: Morningstar Direct, comparison with the Morningstar Fixed Income Euro-Corporate Universe, Lux domiciled funds only.
22
Strengthening our brand
Marketing is not brand
1. Having the right product, for the right
client in each region is fundamental
to building a brand
2. Consistent performance in flagship
products has to be a given
“
Jonathan Ive
Chief Designer, Apple
Your sense of a brand is really a sense of the
product. I’ve never understood how people
can think that you can describe what you
want the brand to be and then sort of
legislate that in a way that’s not entirely
driven by the product.”
3. Culture where all staff build the brand by
reflecting a positive image of Henderson
A believable external message can only be
developed once we have confidence in
delivering the above three.
23
Rebrand
Why?
Objectives
•
Sophisticated, upmarket
•
A fresh start for Henderson
•
Non retail leverage
•
A line in the sand post M&A
•
Non UK leverage
•
Establish our credentials around our
core competencies
•
More coherent and consistent
•
Position Henderson as an intelligent,
sophisticated and aspirational brand
•
Positioned for todays clients –
the buying process is institutionalised
•
Allow us to engage with our audience
through the various routes to market
and establish
•
New websites
24
Our competitive advantage
• RDR means that existing brands are more
desirable
• High barriers to entry for guided architecture
• Strong fit of product to market demand
UK Retail
• Existing relationships with wirehouses and
platforms
• High barriers to entry
US Retail
• Well established sub-brand AlphaGen
• Operational expertise
• Cultural advantage over traditional asset
managers
Liquid Alternatives
• Established network of local offices, local
languages and support to build on
• Strong fit of product to market demand
Continental Europe
25
Global Distribution Strategy
– Focus on Asia
Rob Adams
Executive Chairman, Asia Pacific
Why Asia?
Pan Asia should become a growth engine for Henderson
•
Asian Century is upon us – by 2030 Asian GDP will be greater than 35% of global GDP¹
•
Asia will comprise 22% of global investment management revenues over the
next 5 years (US$385 billion)2
•
Sovereign funds, large Japanese pensions and Australian superannuation shape
the Asian institutional opportunity
•
Henderson has a good foot-print in key markets, but needs to build strong
“franchise” capabilities
•
Focus will be critical…
•
•
•
•
Asia’s top 50 asset owners represent 90% of the institutional revenue opportunity
Australia will drive the DC market
Japan will drive the retail sub-advisory market (local partnership opportunity)
China could become a major growth engine (local partnership opportunity)
¹ Source: ANZ – “The Caged Tiger – the Transformation of the Asian Financial System” , March 2014
2
Source: Casey Quirk.
27
Asia’s heterogeneous marketplaces force firms to make concentrated bets
Market dynamics
Competitive dynamics
•
•
•
Deteriorating corporate pension funding
Lack of domestic income‐generating
instruments
•
•
Substantial fee pressure from regulators
Growing need to diversify domestic‐heavy
portfolios overseas
•
•
MPF fee pressure reduces growth
Local HNW marketplace increasingly
RMB‐denominated
•
•
Regulators opening new pools of assets
Global product demand slowly rising as
government eases curbs
•
•
•
•
•
Pension reform poor growth catalyst
Local HNW marketplace sophisticated
Local structures increasingly favoured
•
•
•
Strong sovereigns, weak retail demand
HNW booking centre for Asian wealth
•
•
•
•
•
Most local players abandoning global
product
Local distributors seek foreign brand names
for thematic offers
•
•
Oversupply in Australian equities
Greater need to move toward passive and
alternative mandates in superannuation
•
Chinese players linking HK, mainland
vendors
More unified “Greater China” market will
create more intense local competition
Success factors
•
•
High‐yielding, credit‐oriented products
Sub-advisory relationships with key
providers and local distributors
•
Differentiated global equity and
alternatives
Access to higher‐fee market segments
such as SMSF, HNW
•
•
•
•
Local products and structures
Strong mainland‐oriented partners
Range of global strategies
Highly concentrated distribution
Regulatory arbitrage favours “national
champions”
•
•
Strong JV partner…
…offset with individual firm ties to
insurers, distributors, trusts
Master trust rule changes could impede
offshore fund sales
Local competitors to tie up with mainland
•
•
Local SITE/SICE infrastructure
Connections with strongest local FHC
distributors
•
•
Sovereigns insourcing significantly
Retail favours brand names that play well in
CPFIS
•
•
Local presence
Alternatives, global products for HNW
investors
Demand focused on local, regional product
Sovereign and pension market growing
•
•
Aggressively globalising local players
Waning interest in cross‐border funds
•
•
Local product development
Bank distributor connections
Fund flows roiled by regulatory changes
No institutional market on horizon
•
•
Local players have best distribution links
Slim demand for non‐Indian product
•
•
Ownership in solid local manager
Long‐term strategy for asset accretion
•
•
Henderson
focus
Greater
China
Secondary
Focus
Source: Casey Quirk.
28
Pan Asia
Expanding distribution presence
Singapore, Hong Kong, Sydney, Tokyo base
Sales
Professionals
Clients
Key Products
Greater China
Japan
2
4
Australia
3
SWFs, platforms,
banks, institutions,
distribution partnerships
National pension funds,
institutions, banks,
distribution partnerships
Super funds,
institutions, charities,
platforms, banks,
financial advisors,
SMSFs
Global Equities,
Global Fixed Income,
Hedge funds
Global Equities,
Global Fixed Income,
Managed Futures,
Hedge funds
Global Equity,
Global Fixed Income,
Enhanced Index,
Global Commodities,
Global Resources
Rest of Asia
6
Banks, discretionary
wealth managers,
institutions,
private banks
Global Equities,
Global Fixed Income,
Hedge funds,
Global Property,
European Equities
29
Blueprint for Pan Asia
Leverage local
business
infrastructure
•
•
•
Gain better leverage from existing business operations in
Singapore, Tokyo, Hong Kong & Beijing
Likely requirement for local product structures
Investigate partnership opportunities to accelerate growth
Introduce key
capabilities to
market
•
•
•
Strong focus on promoting our global capabilities
Re-shape Asian equities under new leadership
Focus on key institutional relationships
Build brand
presence and
grow AUM
•
•
•
Develop a strong institutional brand
Build a diversified book of AUM – global + local capabilities
Become a solid contributor to Group
30
Spotlight on Australia
Create local
business
infrastructure
•
•
•
Local team, full RE license, local transactions
Approach shows long-term commitment
Build on positive brand perception
Introduce key
capabilities to
market
•
•
•
‘Import’ rated and relevant capabilities - global
Local deals with local and global appeal (‘export’)
Demonstrate commitment to the market
Build brand
presence and
grow AUM
•
•
•
Develop a strong institutional brand
Build a diversified book of AUM – dominated by global capabilities
Become a solid contributor to Group
31
Competing in Australia’s crowded market
Early signs support our aspirations
• Pure play active manager, with diversification of offers
• Focus on contemporary global capabilities
• Best quality local team, combining with world-class PMs
• No legacy – a clean sheet and an open mind
• Historical connection with Australia
32
For Pan Asia…
Last 2 years
Next 3 years
Build foundation for Australia
Build core product
franchises across Asia
Re-assess Asia strategy
Institutionally recognised
Produce a plan that sees Asia
as a key growth contributor
Investigate strategic
partnerships in key markets
Active partnerships
delivering
Become a material
contributor to the Group
Create focus
…back to the global plan…
33
Back to the 5 year plan
Last 2 years
People upgrades/ culture
Next 3 years
Globalise the product
suite
Process
Product development
Brand
Home market strength
Institutional development
• US
• Europe
• Asia
European and LatAm
Retail expansion
Retail
Japan on stream
Australia on stream
…only the start of the journey
34
Henderson Global Investors
201 Bishopsgate, London EC2M 3AE
Tel: 020 7818 1818 Fax: 020 7818 1819
Important information
This document is intended solely for the use of professionals, defined as Eligible Counterparties or Professional Clients, and is not for general public distribution.
Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the
amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law
change.
If you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially.
Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does
not form part of any contract for the sale or purchase of any investment.
Any investment application will be made solely on the basis of the information contained in the Prospectus (including all relevant covering documents), which will
contain investment restrictions. This document is intended as a summary only and potential investors must read the prospectus, and where relevant, the key
investor information document before investing.
Issued in the UK by Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355),
Henderson Fund Management Limited (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management
Limited (reg. no. 1795354), Henderson Alternative Investment Advisor Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646),
Gartmore Investment Limited (reg. no. 1508030), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London
EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and
monitored. Ref: 34S
35
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