Goldman Sachs Asset Management is building a global multi-asset proposition for retail and smaller institutional investors, most likely based out of London.
The fund house – with $735 billion in global AUM as at end-2012, of which 13% is sourced from Asia Pacific – has recognised that such a packaged solution is a gap in its product suite that it is now looking to fill.
It is likely to use a multi-asset fund solution to target primarily retail but also smaller institutional clients. It sees a fund solution as a way to gain scale more effectively.
“We have good equity and fixed income managers and we do asset allocation, we have just not put them together in a single place,” says Andrew Wilson, chief executive of GSAM for Europe, the Middle East and Africa based in London.
“It is appropriate for us to have a product and it is likely we will launch something, probably in fund form. It [multi-asset] is where a lot of the assets have flown of late, and we do not really do that.”
The probability is GSAM will look to centralise its multi-asset capabilities out of London, where the majority of its macro expertise is based and where it has a team of 10 focused on multi-asset solutions for European and Asian clients.
But Wilson says the central location is not that important. “The critical driver is that we build a product that is going to give a good return to investors, and we are confident that we can do that effectively,” he notes.
The fund firm also has a group called Global Portfolio Solutions, which houses asset allocation expertise. Combine that with its global equities and fixed income teams, and it already has the necessary building blocks in place.
The question now is whether GSAM will add any specific asset allocation expert, whether it feels that it will get recognition for a multi-asset solution by having a particular person or group of people to come in to do that. Will the story sound compelling enough as it goes out and sell it to investors?
On the question of resources, Wilson says it is more a case of reorganising current capabilities than bringing in external talent, although he does not rule out the possibility.
In terms of timing, Wilson declines to comment, although sources indicate that having started the process at the beginning of this year, it is only about half way through.
“Certainly a multi-asset solution would likely not be ready before the end of this year,” the source says. “The process of getting internal buy-in, understanding how you do it, the resources needed and then launching the fund, that can be a slow process.”
Wilson has been at Goldman Sachs for the past 18 years, having joined the firm in 1995 following stints at the Bank of England and Rothschild Asset Management.
He had been joint-CEO of Europe, Middle East and Africa with Sheila Patel for four years in London until the start of this year, when he became sole head as Patel relocated to Singapore as head of GSAM’s international operations.