Dubai: Dexia Asset Management (Dexia AM), part of the Dexia Group, has opened its office in the Dubai International Financial Centre (DIFC) as part of its expansion in the Middle East and North Africa (Mena) markets and increasing its foothold in the Indian subcontinent.
Undeterred by the recent restructuring of its parent group, Dexia AM is determined to expand its regional presence. "The restructuring of the Dexia Group has not changed our expansion plans in the region. The impact of recent news flows on the group has been minimal on the asset management business," said Sami Al Eid, who heads the Bahrain office and will also take responsibility for the new office in DIFC.
Dexia AM is a first-tier pan-European asset manager in charge of €80.5 billion (Dh406 billion) as of the end of September in assets, distributed among a full range of investment vehicles, including traditional management, alternative management and sustainable management.
The asset management company has teams in Brussels, Luxembourg, Paris and Sydney and sales teams throughout continental Europe, Canada, Australia and the Middle East. Dexia AM has been active in the GCC since 2006 when it launched its office in Bahrain.
The DIFC office is expected to give a wider foothold for the firm in the region. "We see tremendous growth prospects in the Mena area," said Naim Abou-Jaoude, CEO of Dexia AM. "The global economic environment creates new opportunities for asset managers in the region and we want to remain at the forefront of innovation by bringing the right solutions and services to meet our clients' risk profiles and investment strategies."
Asset mix
The overall asset mix of Dexia AM is relatively diverse — compared with some other bank-owned peers in Europe — with 28 per cent in fixed income, 22 per cent in equities, 33 per cent in global balanced strategies and 10 per cent in money market funds. The remainder is invested in alternatives. The Dexia Long Short Risk Arbitrage Fund, which has about €220 million in assets.
According to Dexia's annual report, the asset management division reported net profit of €58.9 million in 2010, an increase of 4.2 per cent from the previous year. Last year its management fees increased by 18 per cent as a result of higher average AUM and higher margins on products.
Earlier this year, worsening Eurozone debt problems coupled with huge losses in the municipal lending business ultimately forced the breakup of the Dexia Group. Following the recent restructuring of the Group, Dexia Bank Belgium was transferred to the Belgian state while its shareholding in Dexia AM transferred to Dexia SA. Following this transaction there have been talks on the imminent sale of Dexia AM.
"For both Dexia SA and Dexia AM's managements the key priority is to preserve and develop Dexia AM's franchise in the best interest of its clients. Thus, Dexia AM is set to continue its business development, relying on our acknowledged expertise and our growing and well-diversified client base" said Abou-Jaoudé in a statement posted on the Dexia AM's website.
The latest Middle East foray is seen as determination to expand Dexia AM's client base despite the adverse business environment.
"The establishment of the Dubai office marks the next phase of growth for Dexia AM in the region," said Al Eid.
"Our growing regional presence will be of much benefit to clients as we bring the latest investment solutions to their doorsteps. We look forward to further deepen our relationships and explore new business opportunities in the Mena region from our office in Bahrain and our new one in the DIFC".
