Sylvain Agar, head of distribution for the UK & Ireland at Principal Asset Management, discusses the firm’s strategic priorities in funds distribution
In the evolving financial landscape of the UK and Ireland, Principal Asset Management is committed to driving growth through strategic initiatives and key partnerships. Sylvain Agar, head of distribution for the UK & Ireland at Principal Asset Management, outlines the firm’s priorities and walks us through the process of how it is positioning itself to meet the needs of institutional and wealth clients in these regions with a combination of strategic focus and tailored solutions.
Threefold priorities
The asset management firm, with its European headquarters in London, is “deeply invested in the UK and Ireland markets”, shares Agar, with over 130 employees across various functions including investment, client-facing and middle- and back-office operations. According to him, the company’s strategic priorities are clear and multi-faceted, aiming to serve institutional clients, develop distribution partnerships, and collaborate with insurance groups.
“Our strategic priorities in the UK and Ireland are threefold,” Agar says. “We are addressing the needs of institutional clients by developing tailored solutions that leverage our investment capabilities across private, public and asset allocation spaces. We are also working to develop distribution partnerships with global and local banks, wealth managers, and discretionary fund managers. Finally, we are partnering with insurance groups to create bespoke solutions tailored to their unique needs.”
With $550 billion in assets under management, Principal draws on a legacy of 140 years of managing assets for clients, particularly through its parent company, Principal Financial Group. This foundation allows the firm to provide strategic solutions that not only address investment needs but also satisfy regulatory reporting requirements, particularly for their insurance clients, shares Agar.
“Our strategic priorities in the UK and Ireland are threefold… addressing the needs of institutional clients, developing distribution partnerships, and partnering with insurance groups to create bespoke solutions tailored to their unique needs.”
Private assets and sustainable solutions
Growth in the UK and Ireland markets will be driven by specific investment themes, believes Agar, particularly in private assets and sustainable solutions. Private real estate continues to be an attractive option for institutional and wealth clients, while the demand for sustainable investment products, such as globally responsible equities and fixed income, is rising across the board. “These solutions were initially adopted by institutional clients, but we are now seeing broader demand in the wealth space as well,” he adds.
To meet this demand, Principal recently launched the Global Sustainable Food and Biodiversity Fund, leveraging its expertise in managing global responsible equities. The firm has also expanded its private real estate investment strategies, emphasising sustainability and “deepening relationships with development and operational partners”.
Fund platforms in distribution strategy
As the asset management industry evolves, fund platforms have become an essential part of distribution strategies, especially in the UK, where independent financial advisers (IFAs) and discretionary fund managers rely heavily on such platforms to place trades.
“Fund platforms have become an integral partner for the success of a distribution strategy,” Agar says. “In the UK, where IFAs and discretionary fund managers often use multiple platforms, being available on these platforms is often a pre-requisite for fund selection.”
“Fund platforms have become an integral partner for the success of a distribution strategy… asset managers must work harder to ensure their products are listed on key platforms.”
However, the high number of funds available for sale in the UK, coupled with the corporate action activities we have seen in the platform world over the last couple of years, has led them to become more selective about which funds to list. This “heightened selectivity” means asset managers must work harder to ensure their products are listed on key platforms. Many platforms have also expanded their services to include enhanced reporting and investor events, providing further opportunities for asset managers to engage with clients and boost flows, Agar points out.
Adapting to regulatory changes
In an era of increasing regulation, particularly around investor protection, asset managers must ensure that their distribution strategies are compliant with evolving regulatory frameworks. Principal Asset Management is no exception. While regulatory changes, such as those introduced by MiFID II, require careful consideration, Agar emphasises that the firm does not change its overall distribution strategy based on these developments. These include reviewing the regulatory landscape to implement and embed new regulatory changes within the business; monitoring business practices against regulatory requirements on an ongoing basis, and ensuring adherence to the applicable regulatory requirements.
Principal integrates regulatory changes into its strategy to stay ahead while maintaining core distribution goals, as compliance is a key part of its long-term strategy, shares Agar.
