Germany: a new crux for growth at OFI AM
Erick Jarjat, in Mannheim
For OFI AM, international activities are a priority. In its “OFI 2020” strategic plan, development in new territories, meaning international development, is one of the priority areas for development at the asset management firm, alongside distribution in France. The implementation of the strategy involves some strong anchor points, including Germany in particular, as growth areas.
The asset management firm, with assets totalling about EUR72bn, did not want to take on the German market alone. “The German market is an attractive, dynamic market, but it is also a tough, very competitive market,” Christophe Mallet, director of international development at OFI AM, told NewsManagers at a major annual conference for investment professionals engaged in the German market, held in Mannheim on 30 and 31 January.
That’s why OFI AM decided to reach out to a local player, the regional bank Oldenburgische Landesbank AG (OLB), which since September 2018, has officially served as the exclusive strategic partner of OFI AM for the German and Austrian markets. OFI AM had initially, in June 2017, signed a simple distribution agreement with Bremer Kreditbank (BKB), the parent company of OLB, but since then, things have taken a different turn for OLB, which has merged with BKB. In the wake of the merger with OLB in summer 2018, OLB has become the single brand for the new group, and has made additions to its asset management activities, including Bankhaus Neelmeyer, a private bank which was previously acquired by BKB. In total, assets under management at OLB are about EUR7bn.
“The birth of our partnership comes at a time when the theme of sustainable development is gaining momentum on the German market. Investors are increasingly conscious of the impact of their investments, and as you know, we have been on this track for over 25 years already, and we have developed a major expertise in sustainable investment, which represents a real advantage, differentiating us from other players in this market,” says Mallet.
OFI AM will now sell 14 products on the German and Austrian markets, including several sustainable strategies under the brand name OFI RS (Responsible Solutions). To this end, OLB has built a dedicated team of four people, led by Nunzia Thiriot, head of asset management at OLB. “We are going to direct our efforts at two major client segments: B2B, meaning funds of funds and private banks, and institutional investors, meaning pension funds, foundations, and businesses,” Thiriot says.
“Our two largest shareholders are large mutualist insurance companies, France Macif and Matmut. So we know the issues institutionals have with Solvency 2 type regulations, ALM solutions, portfolio construction, and of course, SRI, perfectly. That can be an advantage that facilitates our development on the German market,” says Mallet.
The partnership strategy chosen by OFI AM is not a new one. The same approach has previously been used on the Portuguese market. When in late 2014, Macif Portugal was acquired by the Portuguese insurer Caravela, Caravela awarded a management mandate to OFI AM. In addition to extending this partnership with Caravela, OFI AM is working with a local TPM, Bluemint, to explore future developments in Portugal. OFI AM also has a few direct clients via institutional and insurance mandates.
In addition to continuing its growth on the Portuguese market and taking on the German market, OFI AM is also keeping a close eye on the Spanish and Italian markets. “Spain and Italy will probably be our next two destinations. We should be in a position to give you more specific news soon,” Mallet says. International assets under management are expected to account for an growing proportion of assets, although currently, international assets represent only a few million euros.