Natixis’s $1 Trillion Fund Says Market Turmoil Is ‘New Normal’

(Bloomberg) -- Volatile equity markets are the “new normal,” says the head of Natixis SA’s $1 trillion asset-management arm.

“We’re back to the basics: risk on, risk off,” Jean Raby, chief executive officer of Natixis Investment Managers, said in an interview Tuesday at the Canada Fintech Forum in Montreal. “Over the past several years, in a way, bad news was good news because it meant a more accommodating monetary policy. Now we’re in the real world where bad news is bad news, and good news may not be such great news.”

That said, underlying fundamentals aren’t bad, he stressed. No single region is in contraction and emerging markets contagion from Turkey and Argentina is probably “overstated.”

“I have to believe, when I look at the fundamentals, that we are still on pretty sound footing,” Raby said.

Natixis Investment is a unit of Paris-based Natixis SA, controlled by Groupe BPCE, France’s second-biggest bank. Earlier this year, Natixis warned that a global sell-off could hit its asset-management business, although higher volatility could benefit its trading operations.

Raby also said:

• Consolidation among large European asset managers is “a very difficult thing to do”
• Smaller asset managers (2 billion to 20 billion euros) often hit “glass ceilings” in terms of higher technology and expansion costs
  • “It’s those asset managers that come knocking on our door”
• Natixis continues to look for active, entrepreneurial asset managers with distinct brands and expertise in geographies such as Asia Pacific, where the firm is less present

NOTE: In 2017, Axa SA and Natixis SA abandoned plans to combine their asset-management businesses

On Saudi Arabia: Earlier this month, a spokesman said Raby wouldn’t attend an investment conference in Saudi Arabia following the killing of Saudi government critic Jamal Khashoggi. A wave of high-profile withdrawals from the conference was seen as a severe blow to the Gulf nation’s efforts to attract international financiers.

Asked about the longer-term impact on investment in Saudi Arabia, Raby said it’s too early to tell.

“It’s difficult for me to comment on where the future is going specifically for the kingdom of Saudi Arabia,” he said. “In the Middle East we have a relatively small presence. As far as we’re concerned I would like to believe that we could expand that.”

--With assistance from Fabio Benedetti-Valentini.

To contact the reporter on this story: Danielle Bochove in Toronto at dbochove1@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Steven Frank

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