RCM maps out its future

The ability to forge a focused strategy going forward has been an upshot of RCM Capital Management’s recent decision to withdraw from the Australian equities market, according to RCM country head, Australia, Michael Negline.

Last month, RCM announced the impending closure of the Allianz Global Investors RCM Australian Equities Fund, which gave some industry members the impression that RCM’s Australian operation was on its last legs.

However, Negline refuted these claims, describing the decision as commercially driven.

“Given that the market is highly competitive and the money generally follows the 80/20 rule, if you are not in the top 20 per cent from a new business perspective, it is very hard to get on the radar,” he said.

“[So we were] trying to work out what we needed to do to get ourselves in that top 20 per cent, and we were going off on that road earlier this year, but then Jakov Males (head of equities) resigned.

“I think that accelerated in our minds what we needed to do — we felt it was un-commercial of us to look at another two to three years of incubating the product when we had already been incubating it for three to four years.

“So the decision at the end of the day from a commercial perspective was the right decision.”

Negline said letting go of RCM’s footing in the Australian equities space allowed the fund manager to refocus its business strategy.

“The closing down of the Australian equities team has refocused us into a pure product importer leveraging off the best products RCM has to offer globally, but really focusing on what our Australian clients want,” he said.

“The product strategy I’m keen to roll out down here is very simple — I don’t want to be all things to everybody and spread my focus too wide, but also, I don’t want to make the same mistake of the past and have my eggs all in one basket.”

In terms of importing product, RCM is looking at a core offering of both fundamental and systematic global equities with a limited satellite offering of Asian equities, global small caps and global emerging markets, all of which will be client-driven.

Negline intends initially to run a “lean” operation in Australia in terms of staff, which will incorporate him and marketing support.

However, he plans to grow this team simultaneously with RCM’s client base by building resources around success.

He has also been given direction from RCM’s global parent, Allianz Global Investors (AGI), to reinforce the RCM brand within Australia.

“We had a global strategic vision of gradually decoupling RCM as a brand from AGI,” he said.

“RCM made a global decision that what we wanted to do, particularly on the institutional and manufacturing side, was to strip out the RCM brand from AGI and operate as a stand-alone entity.

“The good thing in where RCM is now compared to five years ago is we have shown really stable product teams, with the London, Frankfurt and Hong Kong businesses hugely successful in terms of raising assets.”