Ex-Oppenheimer Exec Plots US Expansion for $44B Manager
Swiss firm Vontobel Asset Management is mostly known in the U.S. for its emerging markets equity products, but under the leadership of new co-CEO Philipp Hensler, the firm is looking to expand its horizons and grow its business in a wider range of asset classes.
“Emerging markets has been a tremendous strategy performance-wise and asset gathering-wise, but we have some products that are equally impressive when you look at their track record,” Hensler says. “What we would like to do is to broaden our reach a little bit towards [international, global and U.S. equity products].”
Hensler left his post as the head of distribution of OppenheimerFunds in December and joined Vontobel last month. He is splitting CEO duties with Rajiv Jain, who retains his responsibilities of CIO. Client service, operations, finance, legal and compliance fall under Hensler’s purview. And while it remains to be seen whether or not Hensler will be able to lead Vontobel to its goal, industry observers are quick to lavish the firm with praise over the hire.
“Philipp is one of the most creative and ingenious sales and marketing leaders in the industry today,” says George Wilbanks, executive recruiter and managing partner at Wilbanks Partners. “I still don’t quite know how Oppenheimer let him get away.”
Hensler’s connections to Vontobel go back to his Deutsche Bank days, when he worked withAxel Schwarzer, Vontobel’s Asset Management global CEO. “I was looking for a smaller firm that offers greater entrepreneurial opportunities,” Hensler says.
The co-CEOs succeed Heinrich Schlegel, a 26-year Vontobel veteran, who will retire and become chairman of the Board of Directors effective July.
As the new guard takes the helm, the firm is already enjoying some positive momentum. Vontobel’s assets under management, which are mainly institutional, more than doubled from $20 billion in 2011 to nearly $44 billion in 2013. According to eVestment nearly $21 billion of assets are managed on behalf of U.S clients.
Vontobel’s performance and asset growth also appear to have caught the eyes of institutional investors and investment consultants. Vontobel’s emerging markets equity products were among the top-10 most-searched products on eVestment’s database during the first quarter this year. The strategies were also the fourth-most searched on the database during the 12 months ended February.
“Vontobel is one of the rare examples of a non-U.S. headquartered asset manager that has established a presence in the U.S. and succeeded significantly,” says Avi Nachmany, president of research at Strategic Insight. “It is not surprising that they show up [in eVestment’s top-searched list] because … the ability to deliver risk-adjusted returns in different market cycles is the hallmark of excellence that institutions search for. Its risk-adjusted return profile is one of the strongest that we observe.”
Though Vontobel may not be a household name, its investment performance and recognition among investment consultants position the firm to expand its reach.
“I suspect they have more capacity for investment management away from the emerging markets space,” Nachmani says.
Vontobel has plans to expand under the “high quality growth at sensible prices” banner, Hensler says. One of his challenges is to shield key investment professionals from non-investment related activities, he says.
“We want to make sure we have the infrastructure [and] the resources in place, not just to accommodate the asset base we have today but also prepare for the next growth phase,” Hensler says. “Clearly I didn’t come here just to mind the store and stay where we are. We have growth ambitions, that is for sure.”
However, he says, the 58-employee company has yet to determine if it the team will grow. “We'd clearly like to strengthen the organization, and that could result in further hiring but we haven’t done the planning yet.”
The great majority of Vontobel’s assets under management, 65%, are in emerging markets equity, followed by 17% in international equity and 9% in global equity, as of Dec. 31. U.S. equity and European equity each represent 4% of the assets under management.
Though U.S. equities are a thin slice of the pie, the company is in a good spot to grow these assets, Hensler says.
“We see U.S. investing as a global exercise as well,” Hensler says. “Many U.S. companies operate on a global basis … While they are U.S. equities in the strict sense of the word, their business models are very global.”
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