Invesco Pursues Global Retirement Business
November 15, 1999
K. Michael Hudnall has been charged with a task that will send him traveling to more than a dozen countries over the next year on what he calls a "fact-finding mission." But the way Hudnall describes his new position sounds more like detective work, and Hudnall says it could not be more exciting.
Hudnall became managing director of international defined contribution services for Invesco of Atlanta, Ga. in mid-August. Amvescap, which is the holding company for Invesco and the AIM Family of Funds of Houston, Texas, has $295 billion of assets under management worldwide and a presence in more than 100 countries. Invesco figures are not broken out separately.
However, Amvescap's defined contribution business currently represents only 10 percent of assets under management. Furthermore, Invesco's international defined contribution business is only two years old and currently operates in only three markets - Hong Kong, the U.K. and Poland.
Hudnall's challenge is to build Invesco's international defined contribution business from there. Since joining the firm three months ago, Hudnall has travelled extensively to meet with other Invesco executives in the institutional and retail sides of the business to learn about markets in many different countries. He has also been meeting with regulators, accountants, marketing executives, plan sponsors, administrators, distributors, banks and vendors who could become Invesco partners.
Hudnall said he is trying to get an understanding of the state of the market in as many countries as possible - the business opportunities, investors, competitors and regulators - to determine where Invesco should expand its international defined contribution business.
Hudnall expects enormous growth in the defined contribution business to begin internationally in the next one to two years and to continue for 10 to 15 years.
"The big dollar flows in the asset management business will be in international defined contributions," he said.
However, determining where to put down stakes is critical, Hudnall said.
"It is not so much a science as it is an art," he said.
Countries in which Invesco is currently most interested include Japan, France, Germany, Italy, Turkey, Australia and Canada because they are wealthy nations with large populations that all will soon be facing retirement savings crises, he said.
"We will have to sort out our opportunities in these places," he said. Hudnall declined to estimate how large Invesco's international defined contribution business could become or what goals he has set.
"Charlie Brady, the chairman [of Amvescap], has not set specific numeric goals - just that we want to be a market leader wherever we go, to take our best shot," Hudnall said.
Hudnall joined Invesco from Scudder Kemper Investments of Boston, where he was a senior vice president in charge of selling insurance and investment management products to 401(k) plan sponsors. Prior to that, he was a managing director at Fidelity Investments of Boston, where he launched Fidelity's mutual fund operations in Canada.
He accepted his new position at Invesco because it is a tremendously exciting opportunity, Hudnall said. He believes that the international defined contribution business will grow at the rate that the 401(k) market grew in the U.S. during the 1980's and 1990's.
"How you grab a hold of that opportunity is the challenge," he said. "It's a great opportunity join a global money manager which, based on some of its alliances, is one of the top 10 around the world and has a very strong commitment to the retirement and defined contribution business."
Hudnall expects to use some marketing techniques that Invesco uses domestically, around the world.
"There certainly are some key underlying principals here, namely the shift away from government pensions and defined benefit plans towards defined contribution and the responsibility of individuals to make their own asset allocation choices," he said. "Regardless of what the competitive, distribution and regulatory framework is in any country, there are similarities."