Your product range in the retail space is quite young. Give me a sense of the journey to now in terms of launches?
In 2010, when our business model was really focusing on the discretionary buyer, it was a very different beast. We are now providing building blocks rather than solutions. We have moved into a world of outcome and solution-driven investing.
We’ve continued to launch products where there are building blocks, but they are in places where we believe we have an expertise and where clients have shown demand.
The most recent launch was an Asian high-yield bond product. There are very few available in the market place and the deal sizes that you need to buy individual securities in the bond world in Asia are very large, so having a pooled vehicle is very important.
Over the past 18 months, we have also developed our range of all liquid alternatives significantly.
We have a very strong, multi-asset fixed-income product called the Strategic Macro Bond Fund Portfolio, which is specifically without credit.
Many clients said to us they wanted to have unconstrained fixed income in a multi-asset product without credit.
It is complementary to portfolios. It can be defensive in difficult times but it can capture almost a macro hedge-fund-like experience within a portfolio. Over the more volatile months during the summer, it performed exceptionally well.
We launched that almost a year ago. We have been fortunate enough to effectively do what it says on the tin. It has been a bond fund that has delivered positive returns over the past year.
Then, you have the pure multi-asset products such as the WealthBuilder range we launched, with cautious, balanced and more aggressive growth portfolios.
In August, with the same global portfolio solutions team, we launched an absolute return multi-asset fund called the Global Absolute Return Portfolio.
That incorporates the Goldman Sachs long-term strategic assumptions on returns for different asset classes. You’ve then got ‘cycle-aware’ investing, which I think is important.
After that, you have got the tactical asset allocation where the chief investment officer and his team will make tactical views over and above the pure cycle-aware investing.
The final level is strategy selection. Within Goldman Sachs Asset Management, you have got a very wide variety of asset management businesses, whether it be fundamental equity, active beta investing, fixed-income investing or alternative investing.
There is just pure quant equity factor driven, long-only equity driven investing. The manager then does his strategy selection to build into his multi-strategy global absolute return portfolio, the appropriate one for that particular market at that time.
Can we expect to see more product launches within the next year, and what is your growth target?
Yes, there will be more products in the pipeline.
At present, we have well over 50 mutual funds. From my perspective, I do not want to have breadth without the quality. We launch products where we think we have an edge, where we think we’ve got a specific capability the market will need or want as they build their solutions.
We want to be at the right size and scale to be able to operate within a guided architecture world very effectively and compete with some of the biggest asset managers.
If you look at this year, we have risen from the 43rd to the 18th largest SICAV. If within the next five years we could get into the top 10, we will be very happy. l
