Agricole advocates ‘blue ocean’ approach

French funds firm says fixed income is the way to go in the 21st century. One of Europe’s best-known bond houses, Credit Agricole Asset Management (CAAM), has embarked on a fixed income crusade, claiming the asset class is one of the few that can provide value in today’s environment. CAAM manages E120bn in bonds and E30bn in equities. “Bond management in the first decade of the 21st century is not the same as in the last decade of the 20th,” said Ian McEvatt, head of international sales and development at CAAM. The French funds firm presents private banks and insurance companies with two ways of doing things. The old “red ocean” thinking focuses on asset compartments from specialist managers, with an emphasis on forecasting the performance of domestic bonds. This leads to inconsistent value, according to Mr McEvatt. The preferred “blue ocean” concentrates on a global approach to constructing a portfolio based on diversification and decorrelation. Arbitrage strategies have replaced long-term portfolios full of bonds with maturity linked to liabilities. “The private banking world is increasingly interested in these institutional strategies,” said Mr McEvatt, citing a deal to manage a Dublin-based bond fund for Merrill Lynch’s private clients as evidence. Wealthy investors have committed E16m since February.