According to Bloomberg Intelligence, passive management in the US is set to expand steadily for the foreseeable future and essentially for active management, the domestic market for most products has gone ex-growth. If they have not done so already, there is an increasing need for ambitious US asset managers to build a more stable three-legged business based in the US, EMEA and Asia, in particular offering strong global, Emerging Market and to some extent US equity products outside the US.

The opportunities for US managers overseas are highly attractive. There are institutional markets to pursue, even with defined benefit markets in decline, in the public sector for example, a rapidly growing private wealth market and, of course, sovereign wealth funds. We met one boutique US manager who had been appointed to a leading UK wealth management platform and it has transformed their business. Where one major appointment occurs others can follow.

The challenge, however, is that the international marketplace is highly competitive. Sales and marketing techniques need to reflect cultural differences and building an overseas business from a US perspective requires patience and visible commitment, often by having people on the ground in key markets.

One further hurdle is in the arena of ESG policies. This is perhaps the only area of the investment management industry US managers lag their overseas counterparts, but it is crucial. Unless there is a demonstrable commitment to combatting climate change and incorporating diversity and inclusion policies into investment strategies, they will fail to gain momentum in building an overseas business. In particular, regulatory issues in respect of ESG policies have to be fully understood to ensure funds have the necessary categorisations to allow full access in Europe.

With all this in mind, raising a US manager’s international profile through strong, tailored marketing collateral, differentiated and forward looking ESG policies, careful media relations strategies to display thought leadership credentials and a demonstrative commitment to individual markets through client service delivered by local employees all maximise opportunities.

Interestingly, the takeaway from last week was an increasing recognition by astute US based asset managers that this is exactly what is required to broaden their business base successfully.