"Our offering is a lot more attractive than our competitors"

In this uncertain context, investors are looking for guaranteed products that offer 100% of the initial investment, plus an extra return. José Luis Jiménez, Group Chief Investment Officer at MAPFRE, highlights the attractiveness of MAPFRE AM's offering compared to its competitors in this interview with Citywire Spain.

How would you rate last year and what strategic objectives have you set down?

Last year was extraordinary for us from the point of view of savings and investment. We attracted net subscriptions of more than 500 million and we overtook our competitors. It was a year in which we continued to commit to Socially Responsible Investment (SRI) and we continued growing MAPFRE Gestión Patrimonial despite the turmoil in the markets. We have a truly open architecture platform in place. I say truly because there are some players in the market who say they have the same thing, but on closer inspection, it’s more like 80% their own products and 20% from other companies, when the inverse of that would be more normal. The start of the year has been fantastic and is on track to be a record year.

Most Spanish managers are committed to fixed income and target profitability products. Are you aligned with that?

Commitment is our starting point for everything. Demand for protection rose significantly during the pandemic. We’d be very strong in terms of Life insurance, guaranteed mutual funds and guaranteed pension plans. I think we have a more competitive offering than many of our competitors.

Are you planning to launch other more innovative products?

Yes, we’ve thought about that and are considering a good number of products. With some, we’re testing the investment thesis and with others, we’re just waiting for the regulator to give us the green light. They will be very innovative and should be well received because we’re always looking for that extraordinary social component.

With the purchase of La Financière Responsable (LFR) in France, we’ve made a quantum leap in responsible investment and will continue to launch sustainable products. But being prudent, we haven’t tried rolling out Article 8 or 9 strategies yet just because they enjoyed more demand; we went for Article 6 products until the rules of the game became clearer. And we’re now seeing that many of our products do in fact qualify for Article 8 or 9.

Do you think the rules of the game regarding ESG are clear now?

I don’t want to say crystal clear, but they are much clearer than a few years back when this type of investment emerged. Many of our competitors have taken a step back, but we’re more conservative. We’re not going to put things at risk for the sake of a seal.

There are only a dozen article 9 funds domiciled in Spain. Do you plan to launch any?

In France, LFR has funds of this type out there. And we’re going to have them too, they’re already there within the group, we just need to get the paperwork sorted. I think it’ll happen this year.

As mentioned, you have recently acquired the French asset manager LFR. What were the reasons for this transaction?

We’ve been partnering with them for five years and their team has more than 25 years of experience. They do very different things. They are well respected and have enabled us to distribute our products in France. We are increasingly working together, hand in hand: we started with a minority stake and ended up as majority owners. This is a significant milestone because it’s the first time a Spanish fund manager has acquired such a company beyond the border, and it’s also a great success story because since we joined forces, they’ve doubled in size.

Will you look for other acquisitions?

We’re not ruling out anything. We need companies that share our philosophy and where there’s a natural fit with the professionals involved. If these two conditions are met, then we could foresee more transactions of this nature in the offing.

What type of business might interest you?

It has to contribute something. We’re not going to buy companies just to get our hands on assets that we already do well ourselves. We’ve tied up with many serious players - LFR, Boyar Value Group, Macquarie, Munich Re, Swiss Life, Altamar and Abante. These alliances make sense and cast us as a differentiated player. We do what we do very well, and we seek out specialist partners to help us in other areas where they have more experience.

What do you think MAPFRE lacks? What kind of partnership could make sense?

If I had the answer to that question, I’d have already made it happen. The sector is changing a lot and you have to be open-minded and humble to be able to spot real value. We'll probably do more, for sure – we’re working in some quite innovative areas. Everything about sustainability and social impact matters a lot to us.

MAPFRE has its own firm in Brazil, LFR in France, a SICAV in Luxembourg. Will you expand to other countries?

We take it on a case-by-case basis. There's nothing on the table, but I can tell you that opportunities come our way every month.

You’ve been in the position for six years now. What do you make of the evolution of insurance companies in the area of asset management in Spain?

We’ve gone from not playing a role in the sector to becoming a very relevant actor. There are three companies: MAPFRE, Mutua and Santalucía and, of the three, we follow a very different path. We created MAPFRE Gestión Patrimonial and were able to tap into the more than 3,400 offices MAPFRE has throughout Spain. We have a specialist financial advisory network that has secured assets of more than 1.4 billion in just five years. We’re very proud of this because it’s been created purely on the back of internal teams, networks and capabilities. We haven't had to go out and buy anything, whereas others have gone down a different path and have bought very different things.

What plans do you have for MAPFRE Gestión Patrimonial?

We’re going to speed up MAPFRE Gestión Patrimonial because there is a lot of demand out there and many clients are feeling quite lost because there are financial institutions that don’t provide good service or just want to sell their product. We have a unique opportunity and we want to bring the model to Latin America because there are significant shortcomings in independent financial advice.

What do you think about the debate taking place within the European Commission on the ban on retrocessions?

I think that banning them would be a big mistake if we look at what’s happened in other countries. In the United Kingdom, millions of people were left without advice, and it’s ended up as something for people with great financial capacity. Countries like Germany haven’t banned them because they believe that networks can provide a good service to their clients by advising them and that the only requirement is to inform clients that they’re getting a commission for distributing a product. The wisest solution lies somewhere in the middle.