Société Générale’s move to sell its Asian private banking business to DBS sent a jolt through the region’s private banking community back in March, and the decision was all the more poignant for fund selector Marc Lansonneur.
In today’s cut-throat financial world Lansonneur is a rare breed, having spent his entire career at Société Générale. From its trading floor to its fund selection unit, Lansonneur acquired experience across a range of asset classes working in London, Taipei, Chicago, Sydney and Paris before finally settling in Singapore as regional head of investment solutions at Société Générale Private Bank Asia.
Now, after 24 years with the French bank, he is preparing for a new challenge. Like many of his colleagues he will be joining DBS once the transaction is completed in Q3 as part of its investment team in a senior management position.
‘I am a bit sad to leave SocGen, which offered me great career opportunities in seven different countries, but I consider this move a very positive challenge, both personally and professionally.
‘My role at DBS will be slightly different from my current position, but I will still be involved in the product fund selection side of the business,’ he says.
The $220 million deal by Southeast Asia’s biggest bank was seen by many market participants as a clear sign of its intent to cement its position as one of wealth management’s big players.
Given that the Asian private banking model is changing and the trend is for an increasing concentration of actors, the sale to DBS made sense, says Lansonneur.
‘SocGen has its due diligence in Europe, and we didn’t have much expertise on Asian assets, in particular on the funds. Over time we managed to integrate some funds based in Asia onto our platform.
‘The team at DBS has very strong experience on Asian assets, and by joining them we will also bring more experience on European funds.‘
CV: Marc Lansonneur
Over his 24-year career at Société Générale, Lansonneur has been a senior options trader, head of gas and power trading as well as head of commodities derivatives, among other roles.
After a four-year stint in Asia between 1994 and 1998, he returned to Asia with the French group in 2008, and later became regional head of investment solutions for its Asian private banking division.
A die-hard rugby fan and player, he has played as prop throughout his career, and currently plays in the Singapore veterans’ league. He is also a member of the committee that is looking to bring the IRB’s Rugby 7s global tournament to Singapore.
Aside from rugby, Lansonneur is also an avid wine collector. He is a small shareholder in a vineyard near Perpignan in the south of France called Clos des Fées, which is run by one of his friends. In another life, he says, he would probably have been a winemaker.
Raised in Toulon, a city in the south of France where rugby is a religion, Lansonneur has been playing the sport his whole life.
I mention to him that at the same time he is entering a new phase of his career, Toulon club legend and English World Cup winner Jonny Wilkinson is also beginning a new chapter. After winning the Heineken Cup and the French rugby league this year with Toulon, the former England number 10 announced his retirement from rugby and his move into coaching.
‘My 12-year-old son is a bigger fan of Jonny than I am, so I had to explain to him that nothing goes on forever. Let’s not forget he will stay with Toulon in the coaching team for a while – I know for sure he loves the place.’
While Wilkinson has come to call Toulon home, Asia has been Lansonneur’s home for a number of years. Based in Singapore, his extensive experience in Asia has also been a tactical advantage, offering him an insight into the region few of his Western counterparts could hope for.
'We have to remind our European and US colleagues that lots of Asian countries are not emerging anymore. Korea, Taiwan, Singapore and Hong Kong are really strong markets'
‘The longer you stay in Asia the more you see what is happening in the US and Europe with more distance. It has given me a real global view, and allows me to better judge what is happening there and the tools to assess the situation.
‘When I go back to Europe or the US it is quite interesting to hear how finance professionals still talk about Asia as an emerging market. Being based in Asia, we have to remind our European and US colleagues that lots of Asian countries are not emerging anymore. Korea, Taiwan, Singapore and Hong Kong are really strong markets, and others are close to reaching the standards of established markets.’
It is the recent strength of Asian countries such as Japan, Korea and Taiwan that has led Lansonneur to reinforce his exposure to the region as they display good fundamentals and robust economic figures.
The Polar Capital Japan fund, run by James Salter, is currently on his fund shortlist, while for Taiwan and Korea his clients prefer to opt for ETFs or structured products that include both countries’ indices as well as Japan’s Nikkei. He also uses Asian bond strategies from Fullerton Fund Management, a group that was recently added to his fund house roster.
‘We are still bullish on Japan, but you will need patience as the currency is in a bit of a stop-and-go phase. We do believe, though, that the dollar/yen will appreciate and push Japanese equities up.
‘We are still neutral on China, though the market is trading at very low multiples, and we are waiting for the right time to invest.’
He may be biding his time on China, but Singapore and Australia are now firmly on his radar, he says.
‘We believe they are offering great opportunities, considering also that their respective currencies should remain strong versus US dollar, euro and Japanese yen.’
One of the most important lessons he has learned over his career as a fund selector is that having too much choice can be counterproductive when dealing with private banking clients.
‘The key is certainly to remain focused. You may have a very wide platform of funds with several hundred funds available for sale, but the key is to be able to select, align your offer with your investment convictions, and promote this offer to the client.’
That is why, from a fund platform of around 400 funds, he tends to have only around 20 funds he actively promotes.
Cutting through the confusion
Another lesson he has learned over the years is that marketing a particular fund or an asset class on its own can end up simply confusing the client.
‘When you show some alternatives to mutual funds – such as a list of equities, bonds or structured products – it helps the client to better understand the rationale of investing in mutual funds.’
For a fund to be included on his shortlist it must have no less than $100 million in AUM. For each theme he selects two to three funds, all of which must offer weekly liquidity.
‘Since the 2008 crisis, fund houses are well aware of the importance of liquidity, in particular for Asian clients,’ he says.
Regular exchanges and meeting with fund managers are also paramount to his selling process; this applies during the good times, but even more so during the bad times.
‘When a fund a manager is able to meet our relationship managers and clients to explain details like why performance is poor or what his convictions are it makes a huge difference.’
One recent example of this was in 2013, when the fixed income market went through a corrective phase. His clients were getting nervous and wanted to pull their investments in some high yield positions, including the Neuberger Berman US High Yield fund.
One of the Neuberger Berman managers flew out to Asia to meet Lansonneur’s clients and assisted him and his team in convincing clients to hold onto their positions.
Fast forward to today, and Lansonneur is less positive on the outlook for the US.
His call for Q3 is to continue to take profits and stay neutral on US assets such as equity and high yield bonds.
‘We would advise our clients to switch to European high yield funds or to floating-rate funds. For instance, we would advise clients to switch from Neuberger Berman US High Yield fund to the Neuberger Berman Senior Floating Rate fund or the Fidelity fund. ‘
There is still value to be found in European high yield, he says, with the BlueBay European High Yield fund, run by Anthony Robertson, another fund he is backing in this field.
Although high yield funds are often a core inclusion in Asian clients’ portfolios, Lansonneur says there has been growing demand for floating-rate funds among Asian investors.
‘We started to promote this when Bernanke first spoke of tapering and quantitative easing. With Asian clients always looking for yield, floating structures offer good diversification opportunities in their portfolios.’
His once-bullish outlook for European equities has also been tempered over the past year, but he is still backing high dividend shares as he believes the current context will make them an interesting asset class.
‘What is really important is to explain to our clients what the risks are behind these funds.
‘Sometimes it can actually be easier to promote a mutual fund than an ETF, because they can be quite complicated.’
Vive la différence
Experience has taught Lansonneur the importance of tailoring investment solutions to suit Asian clients’ idiosyncrasies. The problem today, though, is that many Western groups are failing to follow this rule and appreciate the differences between Asian and Western investors.
A lot of fund managers from Europe and the US are trying to set up their business in Asia by replicating what they do in their local market, and that will never work, he says.
‘They may start to penetrate the Asian markets with some Asian equity funds managed from Europe or the US, which may work for European clients, but these funds are too generic for Asian clients, who are familiar with local markets. To efficiently reach Asian clients you must establish bespoke products and develop local expertise.’
The type of fund manager who is appreciated by both clients and fund selectors in Asia, says Lansonneur, is one who anticipates regulatory changes and keeps his investors informed of their expectations.
This is becoming particularly important with the ongoing discussions between regulators and the fund management industry over a potential Asian fund passport.
‘Though regulation is much more stringent in Europe than in Asia, the cross-border policies in the region are complex.’
The question will often arise of whether or not they can promote a mutual fund in a specific country or to a specific client, he says.
‘As private banks, we are at the end of the chain just before the client, and sometimes the compliance aspect of distributing funds in certain Asian countries can be a real challenge.
‘Such investment passport initiatives will surely help us to boost our distribution and reach more clients.’
This article originally appeared in the July/August issue of Citywire Asia magazine