Pioneer Investments has launched an emerging markets unit in London as one of three new investment teams, reflecting the Milan-headquartered fund manager’s belief in investment opportunities in such markets.

The company, owned by Italy's Unicredit, had emerging markets teams in other parts of the world; they have now been brought together into one entity which combines equity and fixed income.

“The biggest opportunity now is clearly in emerging markets,” Giordano Lombardo, the company’s chief investment officer, said at a press conference in London.

Lombardo also said that emerging markets are the space where the company is looking for talent and that it is expecting to complete the formation of its equity analysts team, which will consists of eight people, by the end of next month. The emerging market-focused credit team will be completed by the end of the following quarter, Lombardo said.

Pioneer is also adding headcount to a new high dividend team in Dublin and a global equity team in Boston. The company has its origins in the US, which today accounts for about 20 per cent of its assets under management.

“The US business is important for us as a market position because dollar-products both in equity and fixed income sell well around the world,” the firm’s chief executive Roger Yates said at the media briefing.

Yates believes that these products are important as the company is looking to break into the Asian market. It reported net sales of $700 million in Taiwan in 2011 and it is now turning its attention to Singapore and South Korea.  

Challenging environment for asset managers

The new teams are outcomes of a recent strategic review, which Pioneer undertook because of what Yates describes as an increasingly challenging environment for asset managers: “The cake is fundamentally getting smaller, and the emergence of ETFs will shrink the active part of the cake for active fund managers like us,” Yates said.

Yates also highlighted the increased amount of regulation: “None of the individual items are particularly difficult, but the number of them is taking additional resources and represents an additional challenge,” he said.

Half of the company’s assets under management, which stood at €162 billion ($217 billion) at the end of last year, come from retail and private banking. The biggest private banking markets for Pioneer are Italy, Austria and Germany, whereas business is “negligible” in the UK, according to Yates.