Robeco eyes Europe asset management, PE buys

LONDON (Thomson IM) – Dutch asset manager Robeco (RBEN.AS: Quote, Profile, Research) is looking at buying European equity asset managers, fund of hedge funds and private equity firms to enlarge its portfolios, but will be very selective, its chief executive said on Friday.

A unit of unlisted Rabobank [RABN.UL], Robeco has 110 billion euros ($145 billion) of assets under management. It also wants to set up an asset management venture in China and is looking at a local partner, Chief Executive George Moller said in an interview.

‘There are areas where..we need to be better or we need to be bigger. Then we would buy,’ he told Reuters, without elaborating on the likely deal size or the time within which he hoped to complete the buy.

It manages about 3 billion euros in European equities and $2 billion under its clean technology and sustainable energy private equity fund but felt the portfolios were small and needed to be enhanced, he said.

‘But we will be very careful,’ Moller said. ”There is an argument worldwide, should you buy or should you build. There are no wild plans.’

Fund houses and financial firms across the world are among the worst hit as the world reels under the worst financial crisis in 80 years. Stock markets from U.S. to China tumbled in 2008 hurting the equity portfolios of asset managers.

CASH, EMERGING MARKETS PREFERRED

While clients still preferred cash and government securities, falling yields are pushing them to look at high dividend and emerging market stocks, Moller said. Emerging stocks .MSCIEF are up some 4.2 percent this year.

Robeco saw net cash inflows of 1.6 billion euros in the first two months of the year compared to 600 million euros in 2008, he said.

‘The first two months have been excellent. It is a sign, in the cash flow side, we could potentially see a rewarding 2009,’ Moller said.

Stocks across the world have risen to several week highs emboldened by recent U.S. initiatives to jumpstart stalled bank lending and rid Wall Street of toxic assets.

But Moller did not see a complete reversal till late 2009 when he hoped U.S. plans would bear fruit.

For now, India and China are high on the list of Robeco, which launched a private equity venture in China with TEDA International (Holding) Corp earlier this month.

‘We are looking at a partnership in China. We would want an asset management venture,’ he said. It already runs a mutual fund joint venture in India with state-run Canara Bank (CNBK.BO: Quote, Profile, Research). The fund manages about $1 billion. (Editing by John Mair and David Cowell) ($1=0.753 euro)