Annual report 2010 - Dexia.com

Activity and results of the business lines // Asset Management and ServicesManagement reportConsolidatedfinancial statementsAdditional information Annual financial statementsAsset Management and ServicesAsset Management and Services includes Dexia’s activitiesin the field of Asset Management, Investor Services andInsurance.ActivityAsset ManagementDexia Asset Management (Dexia AM) has been a recognizedand well-diversified asset manager for fifteen years. Thecompany has four management centres, in Brussels, Paris,Luxembourg and Sydney, and enjoys a firm commercialfootprint in several European countries as well as in Australia,Canada and the Middle East.Dexia AM provides the benefit of its renowned expertise toinstitutional investors, distributors and private clients, coveringall asset classes. Its comprehensive offer spans diversifiedasset allocation solutions adapted to all risk profiles as wellas promising investment strategies such as socially responsibleinvestments (SRI), regulated alternative investments andregional or thematic sector strategies.In 2010 Dexia AM won several new mandates from pensionfunds, corporate and public sector clients in both fixedincome and equities. In particular Dexia AM also developedits innovative solutions in optimized asset allocation, anapproach perfectly adapted to different risk-return profiles andattracting the interest of both existing and new clients. DexiaAM confirmed its position as a pioneer in socially responsibleinvestment (SRI) management by further developing its rangeof SRI solutions and launching a new dedicated website. DexiaAM’s long standing commitment to sound, transparent andcomprehensive SRI disclosure was rewarded with the NovethicISR label for its SRI funds in all asset classes. Dexia AM alsoproved its leadership in alternative investment management,offering a diversified range of UCITS III products well suited toinvestor requirements in a more regulated environment.The performance of the funds managed by Dexia AM wasagain confirmed in 2010. Dexia AM received 3 awards asasset manager and 24 awards for specific funds in 10 differentcountries. More than 75% of its traditional funds have 3, 4and 5 Morningstar ratings for all asset classes.Assets under management reached EUR 86.4 billion atthe end of December 2010, up 5% on December 2009. ThisEUR 5 billion increase is due to inflows in institutional andprivate mandates (EUR 4.9 billion), enhanced by a positivemarket effect (EUR 4.0 billion). Inflows were partially offsetby outflows in retail (EUR -2.2 billion) and institutional funds(EUR -2.7 billion), mainly coming from low-margin moneymarket funds. Private and retail clients continued to show apreference for on-balance-sheet products given the uncertaineconomic and financial environment.Dexia AM’s client mix remained well balanced: as at31 December 2010 institutional assets represented two-thirdsof total assets under management, the remaining one-thirdconsisting of assets from retail (27%) and private bankingclients (6%).Assets under management remained well diversified betweenasset classes: 24% in equity, 31% in fixed income funds,29% in global balanced, 10% in money market and 6% inalternative and structured assets. SRI solutions represented23% of total assets.In October 2010, Dexia presented its financial and commercialtargets for 2014, within the context of an Investor Dayorganised in Brussels. The commercial ambitions set up forAsset Management are detailed in the chapter “Strategy” onpage 19 of this annual report.Investor ServicesRBC Dexia Investor Services is a key player, ranked among theworld’s top 10 global custodians in the world. It relies on anetwork of offices in 15 countries on 4 continents (Europe,North America, Asia and Australia). In 2009, RBC Dexiaexpanded its presence in Italy by acquiring the depositorybank activities of the UBI Banca group, consolidated in theaccounts from the end of May 2010.The equity market rebound in the United States and Canadawas confirmed in 2010, and this, combined with ongoingcommercial development, enabled an extremely satisfactoryperformance to be achieved.Assets under management (1)(in billions of EUR) 31/12/09 31/12/10 VariationTotal 82.4 86.4 +4.8%By type of managementMutual funds 42.6 40.0 -6.1%Institutional funds 18.6 16.9 -9.5%Retail funds 24.0 23.2 -3.5%Private mandates 3.6 5.4 +49.8%Institutional mandates 36.2 41.0 +13.2%By type of mutual fundEquities 16.2 20.1 +24.1%Fixed income 26.7 26.9 +1.1%Global balanced 22.3 25.3 +13.4%Money market 11.8 8.7 -26.1%Alternative and structured assets 5.5 5.4 -2.4%(1) Other funds are counted twice as commissions are received at both fund levels.108 Dexia Annual report 2010