Goldman edges closer to realising

With the help of a major contract from Skandia, GSAM aims to bring its European sub-advisory business to the same level as direct sales. Roxane McMeeken reports. A deal for Goldman Sachs Asset Management (GSAM) to run £30m (E43m) for retail customers of Skandia Investment Management has given a significant boost to the European sub-advisory aspirations of the US house. GSAM will manage Skandia’s Sterling Corporate Bond fund, comprising a specially tailored investment grade portfolio. Clients can also access GSAM’s Global High Yield portfolio – currently worth E985m – now included in Skandia IM’s Bond Income Fund. GSAM’s European strategy is based on two key themes: sub-advisory opportunities through life and pension companies and fund houses with IFA distribution; and direct distribution of funds through banks. The firm manages $5.5bn (E5.1bn) in European sub-advisory assets compared with $38bn in total offshore funds. But Alex Fletcher, GSAM’s head of European distribution, plans to bring the sub-advisory business to the same level as direct sales. Direct sales are targeted to specific types of institutions in particular markets. In France, for example, GSAM focuses on a handful of dominant players and in Italy it concentrates on 20 firms that run the lion’s share of assets. In the sub-advisory business however, lower levels of maintenance required by such relationships will allow GSAM to “spread the net much more widely”, according to Mr Fletcher, who can supply GSAM-branded products, or those “white-labelled” by the client.