“We want to buy distressed assets and merge them into our existing product line,” said Mr Frigerio. “We think that to win institutional business it’s worth trying to do this with the products we have, but we want to boost assets so we have more of an economy of scale. The dream is to make four, five or six acquisitions.”
He added he was talking to firms in the US and Europe, but before buying a company he would need to be sure that it would not necessary to make changes to the way it worked. “We are not talking of big transitional deals here.”
Pioneer is also aiming to grow organically and is hiring staff with aim of reinforcing its sales effort. It has just created the role of head of investment consultant relations Europe, for which it has hired Kerry Duffain, who held a similar post at Citigroup Asset Management. “We will keep hiring in the two areas that we think are crucial – investment and distribution,” said Mr Frigerio.
Pioneer’s purchase of the US financial services firm Safeco in the summer fitted the strategy of strengthening capacity in existing capabilities. The deal added $2.4bn (e1.8bn) in equities and $1.2bn in bonds to Pioneer’s assets under management, which now stand at $166bn.
In the past five years Pioneer has made acquisitions with the aim of gaining new investment capabilities. Buying Oakridge in September this year brought growth investing capabilities, while the acquisition of Momentum two years’ ago got Pioneer in to the fund of hedge funds market. These types of deals appear to be off the agenda now.
Mr Frigerio said his current challenge is to maintain a smaller-company style culture of “flexibility, innovation and entrepreneurship” while the firm grows into a larger player.
RM
