Henderson Global Investors: Power in Numbers - Mark Camp
Unprecedented growth in the European money market sector is creating some very exciting opportunities for investment companies. Mark Camp of Henderson Global Investors tells Patrick Kingsland how his company is grasping this bullish market by the horns.
It is often said that if you can’t beat them, join them. In May 2006, Henderson Global Investors, Federated Investors and BNP Paribas Asset Management (BNPPAM) took this mantra one step further, announcing a distribution alliance for liquidity funds that saw them installed in a genuine position of strength within the European money market industry.
Mark Camp, Henderson’s director of institutional liquidity funds, explains: ‘Individually we stand somewhere like 14th, 17th and 18th among US-style institutional Money Market Funds (MMFs) located offshore in Europe. Together, we stand sixth. This is a major difference – a significant selling point – and it has been the main instigator in getting the chief executives of our three companies to green-light the deal.’
Although they started selling each other’s products more than a year ago, it is only during the last six months that the brand name, Cash Funds International, and its associated literature has become fully operational.
Camp adds: ‘We have three funds and three leaders in their own currencies. If you look at the big providers, at least three of them have sizeable funds in sterling, dollars and euros. Beyond that, however, one sees major mismatches. Now look at what we’re offering: Federated is just shy of $6 billion, BNP stands at €4 billion and Henderson around £2 billion. One needs large funds in all currencies.’
The money market sector has grown significantly in Europe over the last ten years: from less than $1 billion under management in 1995, it recently surpassed the $400 billion (€300 billion) mark. Events such as the BCCI and Bearings collapses concentrated minds and demonstrated that a more coherent attitude towards cash was required.
Camp also highlights the markets’ reversal at the start of the millennium as a real tipping point. ‘It showed that every asset had to be worked harder,’ he says. ‘Cash returns needed to be maximised while continuing to meet legislative requirements.’
This unprecedented growth, as well as the benefits that MiFID, Basel II and other regulatory changes will soon provide, creates a pretty enticing situation.
Despite this, Camp admits that forging an agreement was not all plain sailing. ‘Henderson was the instigator, although I later found out that Federated was looking for some kind of partnership,’ he begins. ‘I approached them just over two years ago to discuss a possible deal.’
The Americans were interested, but ‘I think they liked the idea more in terms of acquisition than partnership,’ Camp chuckles. ‘They were being asked to distribute somebody else’s product in an area that is a core business to them.’
FORGING A DEAL
It took a year to persuade the directors in Pittsburgh, but, with the Americans onside, it was time to return to Europe and complete the team. ‘We had a shortlist of people to speak to. The profile was simple: we needed a partner with a good euro fund and a presence in sterling and dollars that was either minimal or nil.’
Henderson had strong links with BNP Paribas, dating back to the French company’s acquisition of Cogent in 2002. ‘That ensured an audience,’ admits Camp, ‘but the response was extremely positive. And BNPPAM is now headlining the CFI arrangement as an example of how it wishes to grow its future business.’
Having agreed on a joint distribution agreement and a memorandum of understanding, it was time to put the first phase of the plan into operation. They have not looked back since. ‘It’s consummating,’ Camp tells me. ‘Henderson has had three serious accounts open in its sterling fund, all introduced through BNP, and we have done a similar service for both of our partners. The first mega-deal happened very recently, involving a BNP introduction and a dollar investment into the Federated fund.’
And there is plenty of potential for future growth. Camp believes that getting euro money in mainland Europe has still not been fully realised and he sees plenty of further potential in cash collateral created through the increased use of derivatives.
‘These are exciting times and people are excited by what we are doing,’ he tells me. ‘It has justified our courage in doing something that nobody had attempted before.’
ABOUT THE AUTHOR
Mark Camp - Director of Institutional Liquidity Funds for Henderson Global Investors - Mr Camp is responsible for marketing a comprehensive range of Liquidity Funds for Henderson Global Investors and the Cash Funds International (CFI) alliance . Mr Camp was formerly a Business Development Manager for AIM Global Money Market Funds, part of the Amvescap Group. He joined the Amvescap Group just after its inception and made a significant contribution in getting money market funds accepted for regulatory purposes for the insurance and public sectors. Before that, Mr Camp worked for over ten years in the UK insurance market with banking and investment responsibilities.