Olivier Couvreur leads one of the biggest fund selection teams in Europe at ABN Amro Investment Solutions. But it is not just its size that makes this investment management unit of interest, it is the way in which its fund selection model has developed since 2008 when the Dutch retail and private bank lost its asset management arm to first Fortis and later BNP Paribas Investment Partners.
“Before the split, about half of the funds used by the bank were in-house. Since switching to complete open architecture, we have doubled our analyst team,” says Couvreur, who supervises a team of 11 fund analysts. “The number of people involved in open architecture now stands at about 33. This is a big team, but it also includes the people doing operational due diligence, portfolio management, risk management, advisory and client servicing.”
While many large international banks have been centralising their fund selection, partly to reduce costs, Couvreur sees no benefit in such cutbacks. The Frenchman’s extended team operates across four countries on three continents.
“We have six people in Paris, three in Amsterdam, two in Hong Kong and we work with an ex-employee on US equity fund selection in the US. In my view, there is no need to centralise selection,” he says. “We think it is beneficial to have a local presence.”
Couvreur says the fact that half of his team now works from Paris is a legacy of the success of ABN Amro’s private banking subsidiary Neuflize OBC, which started to expand into this field in 1998. His team inherited responsibility for fund selection at the turn of the millennium and was later joined by the Dutch fund selection team from Fortis Mees Pierson, which joined the group in 2010 and still represents the core of the resources based in Amsterdam.
As he outlines his team members’ roles, Couvreur says he is aware he has dedicated more resources to fund selection than most of his competitors.
“We have two people working just on US equity funds, two for European equities, two for Asian and Japanese equities, two for fixed income, two for absolute return and hedge funds, and one concentrating on socially responsible investment.”
He also concedes that justifying these resources is tricky at a time when alpha is so difficult to come by. He understands why smaller wealth managers opt for passive solutions but is adamant that active management can still deliver rewards.
“It may sound like a difficult or less cost-effective proposition but we have around €40bn invested in third-party funds. Though we are a lot smaller than we used to be [ABN Amro employed 200,000 people in 2008; now it has a headcount of 21,000], we are still top-10 in Europe. When you have scale, it becomes fruitful to be active.”