Faced with growing demand for alternatives from advisors, Natixis Global Asset Management has announced that it is expanding its operations to include a new portfolio platform that better gauges market volatility and making a number of new hires who can help investors assess risk.
Unveiled April 4, the Durable Portfolio Construction platform is designed to help financial advisors and individual and institutional investors address their concerns about risk and market volatility in global markets by learning how to create more alternatives-friendly portfolios.
Headquartered in both Boston and Paris, Natixis Global Asset Management (NGAM) has already built a team of more than 20 analysts and consultants and expects it to total 24 members in Boston by the end of May. Industry veterans Matthew Coldren, executive vice president of the Client Solutions Group, and Marina Gross, senior vice president of Portfolio Research and Consulting, are focused on expanding the PRC team by hiring experienced portfolio consultants and chartered financial analysts to help clients evaluate risk and diversification by using portfolio diagnosis and tailored asset allocation.
Natixis Global Asset Management had assets under management of $706 billion as of Dec. 31 and has seen its flow of alternatives increase significantly. In 2011, overall net new flows were greater than $17.3 billion in the U.S, and alternatives accounted for 15% of those flows, double the figure from 2010.
“The demand from our clients for this type of portfolio analysis that focuses on risk has built up over the last year or two,” said Dave Giunta (left), president and CEO of Natixis Global Asset Management U.S. Distribution, in a phone interview with AdvisorOne. “We’ve evolved this over the last couple of years and we feel like a dramatic expansion of the group is really warranted by our clients.”
Giunta said the NGAM Durable Portfolio Construction platform addressed investors’ desire for returns while protecting their assets. The new platform makes risk the primary consideration for asset allocation and helps minimize extreme market movements by making smarter use of traditional asset classes while adding exposure to alternative investments, and employing non-correlated investment techniques such as hedging and long/short strategies, he said.
Giunta used the example of a portfolio with 20 holdings, 10 of which give an investor the same exposure to risk. Advisors can use the Natixis platform to substitute different offerings that have the same return potential but that ratchet down volatility.
“An investor’s target may be 5% in emerging markets,” he said, “but when we look through the portfolio, they might have 5% in emerging market funds, but there could be emerging market exposure spread through a number of their holdings. We help advisors understand their clients’ true exposure.”
Along with its new platform, Natixis is launching a research center that will provide information about asset allocation and risk management. The center will use NGAM research in the United States and the United Kingdom and will conduct new studies of financial advisors and institutional investors to gauge sentiment on issues affecting markets and investors.
In addition, this year NGAM will sponsor a series of Global Durable Portfolio Construction symposiums. Meetings are planned for Rome on May 16, Madrid on June 19, as well as London and several U.S. locations. The symposiums will feature industry leaders, investment managers and global market experts.
Read Natixis Portfolio Managers Recite Alternatives Mantra in Face of Investor Apathy at AdvisorOne.