Strong results in 2010 and Q1 2011
(Thomson Reuters ONE) -
For Robeco, 2010 was a year when not only clients but also the company itself
enjoyed attractive returns. After a strong rebound in 2009, financial markets
continued to offer investors a favorable environment. In addition, it is
pleasing to note that - albeit helped by the euro weakness - almost all
investment products showed positive returns. At the end of 2010, total assets
under management amounted to EUR 150 billion. This is an all-time high for
Robeco and stems from growth of 11% in 2010, following on from the strong
recovery in 2009 (+22%). For 2010 a net profit of EUR 181 million was posted,
following a loss of EUR 11 million in 2009.
The solid performance of 2010 continued into Q1 2011
In Q1 2010 Robeco experienced favorable inflows into US premium equity, high
yield and emerging-market products. Institutional investors outside India
continued to show appetite for Canara-Robeco products. Outflows were reported
across regions and capabilities, but these were not significant. At the end of
Q1 2011, the assets under management remained at EUR 150 billion, resulting from
a combination of net cash inflow, positive market returns and the negative
effects of the weaker dollar. A shift in investor appetite towards higher risk
assets was evident in the gross cash flow.
The year 2010 proved to be one in which most developed markets saw positive
growth again, supported by heavy government spending and very low interest
rates. Emerging markets continued to surge ahead with close to double-digit
growth figures. From this perspective, and taking a longer term view into
account, it makes sense to redefine both types of markets to either 'low growth'
(western economies) or 'high growth' (most of which are located in Asia or Latin
America).
In general, 2010 was a year where some investors returned to the market,
redeploying their risk budgets. Many of them remained sidelined however,
uncertain about the sustainability of economic growth. Clients did demonstrate a
higher degree of risk-appetite again, which coincides with Robeco's relatively
optimistic longer term view on investment risks being rewarded. A word of
caution seems appropriate, however. Given the scarcity of commodities,
continuous growth in high-growth markets, demographics and indebted governments
we may very well witness the return of inflation and with that the end of the
Great Moderation. This would reverse an almost 30-year period of falling
interest rates; something to carefully consider in every longer term investment
policy.
2010 marked the start of a new strategic period for Robeco. The interests of our
clients will be given center stage and Robeco will offer a compact and
competitive range of responsible and actively managed investment strategies and
pension solutions. Thinking consistently in the best interests of clients means
that Robeco can and will advise them on how to cope with the risks attached to
the reemergence of inflation.
The creation of a product range geared towards either hedging inflation risks or
benefiting from them is one of five areas where Robeco will try to make a
difference for its clients. In doing so, Robeco will come up with creative
solutions.
Clear market leader in the Netherlands
Robeco intends to have doubled its institutional market share in the Netherlands
by 2014. To this end, the institutional sales team for the Netherlands has been
strengthened and in the second half of 2010 a dedicated Investment Solutions
department was established, combining all Robeco's pensions and insurance
expertise into a single department. Investment Solutions strives to offer
pension funds and other institutional investors everything they need to face the
challenges of the present and the future, which include population ageing and
longevity and looming inflation.
In addition to the current independent manager-selection process, the
proposition for fiduciary management is being upgraded in several ways. These
include implementation of Dynamic Strategic Asset Allocation (DSAA), determining
and maintaining long-term risk-/earnings expectations including macro-economic
scenarios, the inclusion of an independent risk-management check and the
rationalization of reporting.
One of the first solutions the department has developed is the Robeco Premie
Pensioen Instelling (PPI, a defined-contribution pension institution). PPI is a
means of implementing pension schemes not only in the Netherlands, but also in
other countries, and is therefore well suited for European multinationals. It
will enable Robeco to offer collective defined-contribution pension services
directly to these companies, which stand to benefit from a substantial easing of
their administrative workload and lower costs. PPI will supplement existing
pension providers, pension funds and insurers.
Products: Achieve a competitive sustainable advantage
For the next few years Robeco expects to achieve a sustainable competitive
advantage by focusing its product-development activities on five themes. 1.
Responsible Investing - integrated into all investment products and supported by
SAM's expertise; 2. Inflation products - a fund family that offers protection
from inflation risks and products that enable investors to actively take
advantage of inflation, building on existing skills; 3. Food and agricultural
funds - a product range for the institutional market with diverse risk-return
profiles, which is being developed together with Rabobank; 4. Pension and
investment solutions; 5. Research and quant products - building on Robeco's
long-standing expertise in this area. These five themes will form the starting
point for all entities, asset classes and product lines within Robeco Group.
Expanding synergy with Rabobank
Cooperation between Rabobank and Robeco has gradually increased over the years,
and the synergies that already exist can still be expanded. In the coming years
Robeco and Rabobank will increasingly join forces in terms of business
development, both in the Netherlands and internationally, in the retail as well
as the institutional market. Food & agri business will be one of the spearheads
in the intensified cooperation between Rabobank and Robeco.
It is Robeco's ambition to be recognized as a thought leader and the provider of
choice of sustainable F&A investment products, combining Rabobank's unique
expertise and network in the F&A business and SAM's expertise on sustainability
investing with Robeco's investment skills.
Responsible Investing and Corporate Responsibility
Robeco considers ESG integration - integrating environmental, social and
governance (ESG) factors into investment-analysis and decision-making processes
- to be one of the most important elements of responsible investing. ESG
integration improves risk/return profiles and corporate risk assessment, leads
to more comprehensive company assessments and enables us to discover new
investment opportunities more quickly. Currently ESG integration is applied to
over EUR 60 billion of Robeco's assets under management. This represents more
than 88% of the assets which are in scope for ESG integration.
Enhanced engagement means entering into an active dialogue with companies that
violate the principles of the UN Global Compact, with the option of excluding
such companies from investment portfolios if the dialogue does not produce the
desired result. It should be noted that in certain countries, at the request of
clients, the exclusion policy is not applied. By the end of 2010 Robeco had a
list of more than 80 companies that qualify for enhanced engagement. Robeco's
Responsible Investing department has already started a dialogue with 21 of these
companies and this number will increase in 2011. Emerging markets have been in
Robeco's overall engagement program since 2010, so our engagement themes include
companies from both developed and emerging markets. However, Robeco has certain
themes that focus specifically on emerging markets, such as sustainability
reporting by companies in South Korea, South Africa and Brazil. In 2010 Robeco
started engagement activities for credit investments. By the end of 2010 around
30% of all engagement activities on portfolio holdings were related to the
credit portfolios of Robeco and its clients.
Overseas
Robeco's US operations enjoyed a good year in 2010. More specifically, Harbor
Capital Advisors realized excellent performances for its clients and saw its
assets under management grow to EUR 45 billion (+31%). Robeco Investment
Management was very successful in terms of cash flow and profitability, and
three-year track records are strong.
Robeco Middle East celebrated its tenth year in the Gulf in 2010. It takes time
to get a foothold in the Middle East, but in the course of the last ten years
the Bahrain team has strongly established Robeco's reputation. Canara Robeco,
Robeco's joint venture in India which was established in 2007, has developed
well. Assets under management and advice amounted to almost USD 1.5 billion at
the end of 2010 and Canara Robeco's portfolio managers are ranked among India's
best. In mid-July, a large Dutch pension fund invested EUR 100 million in
Robeco's locally managed Indian Equities strategy, giving the joint venture with
Canara Bank a substantial boost.
Robeco Greater China has made progress in extending its reach in terms of
distribution in the Greater China Region. In Taiwan, Robeco started distributing
its funds through strategic partners Shin Kon Life Insurance and Fubon Bank.
Robeco's Hong Kong office has recorded gradual and steady inflows from our
private-banking partners.
A USD 500 million mandate for the SAM Smart Energy strategy has cemented
Robeco's position as a recognized institutional asset manager in China.
About Robeco
Robeco, established in Rotterdam in 1929, offers investment products and
services to institutional and private investors worldwide. It has approximately
EUR 150 billion in assets under management (at 31 December 2010).
Robeco advocates responsible investing. Environmental, social and governance
factors are integrated into the investment processes, and there is an exclusion
policy in place. Robeco makes active use of its voting right and enters into
dialogue with the companies in which it invests.
The product range encompasses equity and fixed-income investments, money-market
funds, responsible investing and alternative investments, including private
equity, hedge funds and structured products. The various strategies are managed
from Rotterdam (head office), Boston, Hong Kong, New York, Paris and Zurich.
To service institutional and business clients, Robeco has offices in Bahrain,
Greater China (Mainland, Hong Kong, Taiwan), France, Germany, Japan, Korea,
Luxembourg, Spain, Switzerland and the United States. Robeco has a banking
license in the Netherlands, where it can sell its products straight to private
clients.
Robeco holds a 100% interest in Corestone (Zug, Switzerland), Harbor Capital
Advisors (Chicago, US), Transtrend (Rotterdam, the Netherlands) and in SAM Group
(Zurich, Switzerland). Robeco also holds a 49% interest in Canara Robeco Asset
Management (Mumbai, India) and a 51% interest in Robeco Teda (Tianjin, China).
Robeco is part of Rabobank Group, one of the few privately owned banks in the
world with the highest credit ratings from Moody's and Standard & Poor's.
Furthermore, within the banking sector, Rabobank is one of the global leaders in
terms of corporate social responsibility and sustainability.
Ronald Florisson, Robeco Corporate Communications
Office: +31 (0) 10 224 2810
Mobile: +31 (0) 653 831 586
E-mail:ronald.florisson(at)robeco.com
Business development 2010
Global business development (in EUR billion)
2010 2009
Total Retail Institutional Total Retail Institutional
AuM at opening date 134.9 67.1 67.8 110.7 52.9 57.8
Investment result 19.6 10.5 9.0 19.2 10.8 8.4
Net cash flow -3.4 3.4 -6.7 7.5 3.9 3.6
Other gains / losses -1.5 -0.1 -1.5 -2.5 -0.5 -2.0
AuM at closing date 149.6 81.0 68.6 134.9 67.1 67.8
Growth in assets under management
At the end of 2010, total assets under management amounted to EUR 149.6 billion.
This is an all- time high for Robeco and stems from growth of 10.9% in 2010,
following on from the strong recovery in 2009 (+21.9%). The continual recovery
in the financial markets in 2010 affected Robeco's assets under management
considerably. The increase is the result of a positive net investment result of
EUR 19.6 billion and a net cash outflow of EUR 3.4 billion. The investment
result also includes a positive contribution of EUR 3.0 billion caused by the
appreciation of the US dollar. The annual dividend payments and interest
distributions are included in 'Other gains / losses'.
Net cash flow
In terms of net cash flow, the year was mixed. The net cash outflow of EUR 3.4
billion was mainly the result of significant outflow caused by rebalancing and
strategic re-allocation by a small number of institutional clients. It affected
mandates with relatively low fees. The retail cash inflow was strong,
particularly into the mutual funds of Harbor Capital Advisors in the US. Also in
Europe, the cash inflow from retail clients was strong and well-diversified. The
net cash flow was negatively affected by the fact that some (structured)
products and investment concepts terminated. As previously announced in 2010
Beon in Groningen withdrew the mandates it had awarded to Robeco, but, despite
this and other outflows from a small number of institutional clients, cash
inflow was very good, particularly in equity products. Cash-flow revenues
significantly improved for Robeco in 2010.
Financial results
EUR x million 2010 2009
Assets under management (EUR x billion) 149.6 134.9
Management and performance fees 932.8 665.0
Operating income 763.6 512.2
Operating expenses -482.3 -528.0
Operating result 281.3 -15.8
Non-operating result -24.7 13.8
Taxes -75.3 - 9.0
Net result 181.3 -11.0
For 2010 a net profit of EUR 181.3 million was posted, following a loss of EUR
11.0 million in 2009. Operating income increased by a substantial EUR 251.4
million to EUR 763.6 million (+49.1%) in 2010. Both higher management and
performance fees, in total EUR 932.8 million (2009: EUR 665.0 million),
contributed to the increase in income from asset-management activities.
The increase in management-fee income was a direct result of the increase in
assets under management due to the overall positive net investment result and
excellent inflow on strategies that yield attractive fees. It was also
attributable to the stronger US dollar in 2010. Furthermore, in 2010 Robeco
generated a higher performance fee income as a result of the improved investment
returns of performance-fee related products. Despite strong investment
performance by Transtrend, the performance fees were only moderate because they
were subject to high watermarks. This means performance fees are not paid until
the funds have recovered to previous levels. Nevertheless, gross performance
fees amounted to EUR 94.7 million, recovering from EUR 16.1 million in 2009.
In spite of a decrease in entrusted savings, the interest income from banking
operations improved as the Dutch savings market saw a normalization in savings
rates in 2010. The yield on the investments - such as loans, mortgages and
government bonds - showed a similar pattern, although to a much lesser extent.
Operating expenses amounted to EUR 482.3 million, which was 8.7% lower than in
the previous year. This result directly added to the strong recovery of Robeco's
bottom line profitability.
In 2009 Robeco launched a program to create a more efficient organization, fit
for future growth. As the majority of the measures were implemented during
2009, the full-year effects of this restructuring program became clearly visible
in 2010.
The 'Other expenses', which form part of 'Operating expenses' and are mainly
made up of out-of-pocket costs, declined by 18.9% and amounted to EUR 198.0
million in 2010.
In July 2010 Robeco's strategy for 2010-2014 was finalized and approved by
Robeco's Supervisory Board. In order to further increase profitability, Robeco
started several projects. One of the major projects is to substantially reduce
the long-term information technology (IT) and operations expenses to a benchmark
level. Although the IT and operations expenses already decreased in 2010, they
remain relatively high, when compared to those of our competitors, due to
project costs relating to the replacement of some key IT applications. In
November 2010 the fund-accounting system, MultiFonds, became operative. This
system provides a single source of information for the daily NAV and financial
reporting for mandates and Dutch- and Luxembourg-domiciled funds.
In addition to reductions in IT expenses, expenses for temporary staff also
declined further in 2010. Compared with previous year, at the end of 2010, there
were 27% less staff who had been hired on a temporary basis. The organization
also reduced marketing and advisory related expenses.
Impairments and other market-related events that had a negative impact in
previous years were not a factor in 2010. The impairment result on the asset-
backed-securities portfolio showed a positive result as reversals due to
increases in fair value occurred for some assets that had been impaired at an
earlier date and these more than offset the one occurrence of impairment that
was recorded during 2010.
The non-operating negative result was mainly caused by losses on hedge positions
associated with foreign currency fluctuations (compensated by comparable gains
in other line items) and the sale of Banque Robeco, Robeco's private banking
operations in France.
In December 2010 Oddo & Cie agreed to acquire Banque Robeco and ownership was
transferred from Robeco to Oddo on 31 March 2011.
The effective corporate tax rate was 29% in 2010. A number of negative non-
deductible one-off tax items and the fact that US earnings were subject to a
higher local tax rate caused the effective corporate tax rate for 2010 to exceed
the Dutch base tax rate. Shareholders' equity amounted to EUR 1,605 million at
year end 2010, which represents an increase of EUR 238 million. The increase was
mainly due to the 2010 net result of EUR 181 million and positive unrealized
results within the available-for-sale reserve and other revaluation reserves.
Press Release Annual Report 2010:
http://hugin.info/130786/R/1509241/444065.pdf
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originality of the information contained therein.
Source: Robeco via Thomson Reuters ONE
[HUG#1509241]
Unternehmensinformation / Kurzprofil:
Datum: 27.04.2011 - 10:15 Uhr
Sprache: Deutsch
News-ID 53913
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contact information:
Town:
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