The redeployment of capital, new opportunities in fixed income and the transfer of wealth between generations are the three biggest opportunities distribution leaders are looking at in 2023.

Citywire Amplify spoke to some of Europe’s most senior figures in fund sales. The bad news for next year comes as another packet of three: ‘recession, inflation and geopolitics’, as LGIM’s Steven de Vries put it.

But a smart distribution strategy is several moves ahead. At some point, clients will be able, if not willing, to put their money to work again. It’s the job of a distribution team to convince them to deploy and, when that happens, be the group they turn to.

‘They are sitting on their hands,’ said Richard Garland of Ninety One. He feels the tide may turn in 2023 when – at some point – inflation peaks and interest rates stop going up.

‘Everything we are doing is keeping the relationship with clients, so that when they decide to invest they remember we were in touch with them in the really tough times.’

Gabriele Miodini of Eurizon agreed. ‘Tough times always bring opportunities,’ he said. With retail clients sitting on cash, ‘the opportunity is huge, and we’re inviting clients to redeploy assets’.

Interesting times

There was also talk about fixed income roaring back.

‘It’s been a dormant, boring asset class for quite a long time, with very low yields,’ said De Vries. LGIM is developing its active offer in the asset class, he said. ‘Now interest rates are going up, there is inflationary pressure, and we are seeing a lot of interest from our clients in fixed income.’

Miodini also spied fixed income opportunities, particularly in the early stages of the year, moving gradually towards the riskier end such as emerging markets or high yield.

Think of the kids

M&G’s Micaela Forelli raised the issue of older investors passing money to their children or grandchildren as part of the ‘intergenerational transfer of wealth’.

‘The main opportunity also from our clients’ point of view is the big change in the ownership of wealth,’ said Forelli, who said her response would be ‘innovative instruments and guiding the next generation of investing for the long term.’

In this video are:

• Steven de Vries, head of wholesale distribution for the UK, Europe and Latin America at Legal & General Investment Management;
• Micaela Forelli, head of European distribution at M&G;
• Richard Garland, head of Ninety One’s global advisor business; and
• Gabriele Miodini, head of international business development at Eurizon Capital.