Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. Well the Atlanta
Speaker 1: based money manager Investco. They reported earnings today topping Wall
Speaker 1: Street expectations. They operate twenty five countries roughly one point
Speaker 1: three trillion in assets under management. So we are delighted
Speaker 1: to welcome Investco President CEO Marty Flanagan in another edition
Speaker 1: of Bloomberg Business Week talks to be featured in an
Speaker 1: upcoming issue of Bloomberg Business Week magazine. Marty, nice to
Speaker 1: have you here. How are you well? Thanks to happy
Speaker 1: and UHO, great and happy one to you and all
Speaker 1: your listeners and watchers. Well, good to have you here
Speaker 1: in fingers Cross. That is not like how do you
Speaker 1: see it? And do you think it's going to be
Speaker 1: another difficult market year? Uh? Look at you bring up
Speaker 1: a good point. Was you know something that none of
Speaker 1: us have ever imagined living? And uh, I will say
Speaker 1: a lot of the work that was done in sets
Speaker 1: up a very interesting environment going in one. I think
Speaker 1: everybody's looking for strong economic growth in the United States,
Speaker 1: in particular in those countries around the world, driven by
Speaker 1: the optimism and the ability to start to get back
Speaker 1: to work with the vaccine coming and all us frankly
Speaker 1: learning how to work in different ways. Yeah. Absolutely. Well,
Speaker 1: what's interesting is our Peter Koy, Bloomberg Economics editor, uh,
Speaker 1: Bloomberg Business Week Economics editor. He's got a story out
Speaker 1: there about whether or not we're setting up to be
Speaker 1: like the roaring nineteen twenties, the what we saw after
Speaker 1: another time period in our history where we had a pandemic,
Speaker 1: we had a tough economy. Um, and whether or not
Speaker 1: we see we you know, we come roaring back. How
Speaker 1: do you see it? Do you think that we might
Speaker 1: be creating bubbles right now and that we're going to
Speaker 1: pay the piper at some point, or do you see
Speaker 1: us setting up for maybe a really positive type of
Speaker 1: market environment, some economic momentum that feels much more normal
Speaker 1: and maybe even upbeat. Yeah, so, uh, lots of good
Speaker 1: thoughts there. Let's go to the more immediate outlook, and
Speaker 1: I think you can really have, as your connects are saying,
Speaker 1: a really strong economy right with all the fiscal stimulus
Speaker 1: has been put in there, with all the monetary policy
Speaker 1: of changes that have been put in monetary support. But Frankly,
Speaker 1: all businesses really put the head down and did everything
Speaker 1: they can to be operating more efficiently. You know, really
Speaker 1: is a protection last year been you look into this year,
Speaker 1: you can see some real earning surprises. We're going to
Speaker 1: need that because of some of the evaluations. But you know,
Speaker 1: the momentum that we're seeing in our business is as
Speaker 1: strong as it's been in two and a half years.
Speaker 1: So I do think that as part of the optimism
Speaker 1: that's coming out of it, and really people seeking greater
Speaker 1: returns as you know, with heels being so low and
Speaker 1: you know so much of the markets. So Marty, what
Speaker 1: will the pandemic? What's been the impact on your business
Speaker 1: and running uh a money management business? Uh in what
Speaker 1: has been kind of the lasting impact here? Yeah, so
Speaker 1: I would, uh, you have to put in perspective, um,
Speaker 1: you know, I would say it was harder for money managers.
Speaker 1: I'd say us, I will say specifically than the national crisis,
Speaker 1: just because the steepness of that and so quickly the
Speaker 1: market pullback. And whoever would imagine having in your global
Speaker 1: workforce working from home. We didn't, everybody else did. But
Speaker 1: how we're interacting the clients around the world has forever changed. Um. Yeah,
Speaker 1: every you know that we can bring uh you know,
Speaker 1: the whole organization to our clients in a moment's notice.
Speaker 1: Now we could have done it before. It just wasn't
Speaker 1: the cultural thing to do. We will end up seeing
Speaker 1: clients in person going forward. But these digital engagements have
Speaker 1: just really changed the game. I think that's a really
Speaker 1: positive thing. Um And I will say the other thing.
Speaker 1: Our industry has been, as you know, you know, going
Speaker 1: under tremendous change. And that was happened before the crisis.
Speaker 1: But the bigger gonna be bigger and their only stronger.
Speaker 1: It's going to happen faster posts this pandemic. Well, and
Speaker 1: it's interesting. We've seen a fair amount of consolidation too
Speaker 1: in your industry. What's your expectation do you think that
Speaker 1: there will be further consolidation within the asset management and
Speaker 1: money management industry this year? I do? You know, Look,
Speaker 1: I've been saying that for a period of time, but
Speaker 1: I will say, uh yes, ever since I've gotten the industry,
Speaker 1: there's calls for consolidation. Very little happened. It's very different though.
Speaker 1: Now clients are working fewer money managers than that's happening
Speaker 1: around the world. Uh, there's a greater expectation what clients
Speaker 1: want from money managers. That's ultimate a very good thing
Speaker 1: for clients and consumers, but it is putting a lot
Speaker 1: of pressure on money managers and that is really where
Speaker 1: you absolutely need scale within your business at multiple levels UM,
Speaker 1: and that's how you're going to serve your clients. They
Speaker 1: want depth and breadth and capabilities beyond just managing money.
Speaker 1: So I think you're going to continue to see combinations.
Speaker 1: But the other thing, YEA, the growth, it's not all
Speaker 1: going to be through M and A. I mean there
Speaker 1: will be just firms that are disadvantaged to leave no
Speaker 1: good of the stronger firms. Nelson Pelts is on your board.
Speaker 1: His try On Fund Management has a nearly ten percent
Speaker 1: holding in the company, I think the third largest in
Speaker 1: invest go. What's the end game? I mean we're just
Speaker 1: talking about consolidation UM. What are you hearing from him
Speaker 1: or what do you expect in terms of how this
Speaker 1: relationship might impact the company? Yes? So, Uh, Nelson joined
Speaker 1: the board as it ed Garden, his partner and Tom Fink,
Speaker 1: who was the CEO of UM Bearings at the end
Speaker 1: of last year. As you know, both all three really
Speaker 1: talented people that they know that's center extremely well. UM
Speaker 1: and uh Nelson and Ed and UM consists of our
Speaker 1: board view the industry in a very same way, UM
Speaker 1: that it can just be a large, growing industry, but
Speaker 1: it's going through dramatic change and that UM, you know,
Speaker 1: this this sort of movement to stronger and stronger, larger
Speaker 1: than more capable firms is really you know, top of
Speaker 1: mind with them, and UM, you know, it's just very
Speaker 1: helpful to have you know, people have been through uh
Speaker 1: all sorts of change in development and other industries to
Speaker 1: and bring in that perspective. So it's been early days
Speaker 1: for all three of them, but it's been great additions
Speaker 1: to what is already a very strong board. Is it
Speaker 1: safe to say you have to you have to be
Speaker 1: bigger to go after the likes of black Rock and Vanguard. Uh? Yeah,
Speaker 1: So I look at a different way. Really, it's really
Speaker 1: to serve our clients, right, and you know what we're
Speaker 1: seeing from our clients all around the world is they
Speaker 1: want everything for passive portfolios, to factor portfolios, to high
Speaker 1: conviction active alternatives, and they want you know, a bunch
Speaker 1: of analytical tools and support to help them do their job.
Speaker 1: And you really have to have skill to do that.
Speaker 1: And so not just you know, investment keep uh skills,
Speaker 1: but also the operational skills and the ability to invest
Speaker 1: in things like technology of CERTA clients. And if you
Speaker 1: do that very well, UM, you know you're going to
Speaker 1: continue to grow. Hey listen, you know you just said
Speaker 1: you know, yeah, I know you talk about all the
Speaker 1: options that your clients want, and that's really what you
Speaker 1: know what you guys stay focused on what your clients want,
Speaker 1: want investors want. But I do wonder to UM, we've
Speaker 1: had so many conversations here at Bloomberg about you know,
Speaker 1: actively managed e t f s. You know, what do
Speaker 1: you think is the future of that? So we just
Speaker 1: launched for nonparents parent ETFs in December. UM, it's actually
Speaker 1: very interesting. So obviously the EATYP growth has been just spectacular.
Speaker 1: It's largely been in capulating indexes as you know, uh,
Speaker 1: but where we have been very successful is in the
Speaker 1: factor area. So it creates another alternative where you can
Speaker 1: have no transparent ets for active management within a different vehicle.
Speaker 1: There is a preference towards that vehicle. UM. That said,
Speaker 1: we're really excited with the launches, but I suspect this
Speaker 1: kind of take some time before you're going to see
Speaker 1: a lot of momentum in the area. But again, very
Speaker 1: few money managers have that capability one of them, and
Speaker 1: we're happy to have it. Hey, listen, One place that
Speaker 1: you guys are seeing a lot of momentum in and
Speaker 1: you continue to focus on it, Marty, is obviously what
Speaker 1: you're doing in China. And I know you guys are
Speaker 1: looking for growth. I think you put this out last
Speaker 1: year of more than your China assets in three years. Um,
Speaker 1: how is that going? And I know you've been looking
Speaker 1: to boost your ownership to I think in the joint
Speaker 1: venture that you have there. How is it going? And
Speaker 1: are you at all a little nervous about a new
Speaker 1: administration and what the relationship will be between the US
Speaker 1: and China. So UM, you know, right now we manage
Speaker 1: seventy six billion dollars of assets in China for Chinese,
Speaker 1: whether it be through our joint venture you're referring to
Speaker 1: directly with institutions. The growth has been unbelievable. It was
Speaker 1: a record year again for um our China business. In
Speaker 1: the last half of the year, they had something like
Speaker 1: seventeen billion dollars and that inflows. So it is um,
Speaker 1: you know, an overnight success after twenty plus years. Uh,
Speaker 1: you know in the marketplace. UM, I think frankly, uh uh,
Speaker 1: the relations between US and China is important. Uh. It
Speaker 1: was definitely creating complications for all of us that were
Speaker 1: operating there. Um, you know, not in the material way,
Speaker 1: but I'd say it was uneasy as you were looking
Speaker 1: into the future. And I think it's really important for
Speaker 1: two world powers to um, you know, be on the
Speaker 1: same page, and it's good for each country, is good
Speaker 1: for the world. So I'm hopeful that that's what's gonna
Speaker 1: happen us we look forward here. Okay, it does feel
Speaker 1: like a little bit of a new day, safe to
Speaker 1: say early days, but it sure does. Yes. Well, let
Speaker 1: me also ask you, um, just some of the things
Speaker 1: you just have about a minute or so, a minute
Speaker 1: and a half left here, some of the things that
Speaker 1: we are talking about increasingly, whether it's bitcoin, whether it's
Speaker 1: Robin hood, what of kind of some of the newer
Speaker 1: trends that are out there that you find it interesting
Speaker 1: that you think investors overall, folks in the financial community,
Speaker 1: in the investment management world need to pay attention to
Speaker 1: right now. Yeah, so it's it's a good question. It
Speaker 1: all depends on who you are, right but I think
Speaker 1: you have the reality still gets back to basics. Truly
Speaker 1: understand what you're trying to accomplish, what returns you're trying
Speaker 1: to get, what risk really to take in, you know,
Speaker 1: the basic of time horizons. Uh, developments such as bitcoin
Speaker 1: and the like. I think it's still early days. It's
Speaker 1: obviously very very topical. You're seeing a lot of energy
Speaker 1: behind it right now. Uh, I'd say it's not not
Speaker 1: for everybody. And my basic view is that, um, very interesting.
Speaker 1: But you know you're going to see central banks in
Speaker 1: the game, you know, at some point too, and I
Speaker 1: think that puts the value of it at risk quite frankly.
Speaker 1: Is that two years after so I don't know. Yeah, Hey,
Speaker 1: let's one last thing. Um, spacks is another thing that
Speaker 1: they're just kind of exploding. Um. Does it make you
Speaker 1: at least a little bit nervous in terms of what
Speaker 1: that might mean for the investment world? Does that look
Speaker 1: like a bubble to you? And just got about thirty
Speaker 1: seconds here, Yeah, so any time something grows that fast
Speaker 1: and it's so wonderful. It's probably good to question, you know,
Speaker 1: how long it's gonna last, so I would warn the
Speaker 1: bubble camp quite frankly. So all right, we're gonna leave
Speaker 1: it on that note. And Marty, thank you so much.