Pioneer ready to fight for inflows

Pioneer Investments is in the process of building out an emerging-markets hub in London that it can leverage to launch equity and fixed-income funds as part of its five-year plan for organic growth, global chief executive Roger Yates said in a conference call this morning. The firm also will add 10 wholesalers to its 40-person sales force by the end of the year.
The new initiatives come on the heels of a strategic review of the business because of the increasingly challenging asset management landscape, Mr. Yates said.
“Globally, the asset management space is a lot tougher place than it has been in the past,” he said. “It’s become an industry where flows of new assets tend to go to a relatively small number of providers in each product category. We’ve got to fight for every dollar of flows we get.”
Cogent Research found similar results in its latest Investor Brandscape report, published last week. It found that affluent investors — those with more than $100,000 of investible assets — are beginning to consolidate the number of providers they use. Affluent investors used an average of 1.56 fund providers last year, down from 1.96 in 2010.
Mr. Yates sees strengthening Pioneer’s investment capabilities as a way to make the firm stand out in an increasingly crowded marketplace.
Pioneer has already added six investment professionals on the fixed-income side and plans to add five more, with a particular focus on developed international and global specialties. The recruitment for the emerging-markets home base is also “well under way,” Mr. Yates said.
“Everyone knows that superior returns are in the emerging economies of the world,” said Daniel Kingsbury, chief executive of Pioneer’s U.S. arm. “Increasingly, clients who are looking for diversification and returns at the same time are turning to those markets.”
Pioneer has one emerging-markets fund — the $392 million Pioneer Emerging Markets Fund (PEMFX) — but its three-, five- and 10-year returns each have landed it in the bottom quartile among diversified emerging-markets funds, according to Morningstar Inc.
The allure of emerging markets never faded last year, even as returns sank over concerns about China’s growth and spillover from a recession in Europe. Emerging-markets equities were the top-drawing equity mutual fund category, attracting almost $20 billion in inflows. Emerging-markets debt attracted another $12.5 billion, according to Morningstar.
Pioneer is also boosting its efforts to reach financial advisers. It will add 10 wholesalers by the end of the year to bring its total to 50, Mr. Kingsbury said.