Armed with its new name, RBC Global Asset Management U.S. Inc. is expecting double-digit growth in 2010, as it works more closely with its parent bank and other RBC asset managers to introduce new products.
Voyageur Asset Management Inc. in Minneapolis announced Tuesday that it changed its name effective Dec. 31. Michael T. Lee, the chief executive, president and chief investments officer of the U.S. unit, said in an interview that the name change is an important step in its evolution into the U.S. institutional client platform for RBC Global Asset Management.
Lee said that as part of the RBC platform, his unit will be expanding its array of investment products in the next few months. In addition to plans to introduce some alternative products, he said RBC Global Asset Management U.S. plans to add a multistrategy U.S. equity product and a global fixed-income product.
Both are being built with investment teams in the U.S. and Canada, along with RBC Global Asset Management's other asset units — RBC Asset Management Inc. and Phillips, Hager & North Investment Management Ltd.
Collectively, RBC Global Asset Management had $187 billion of combined assets under management at Oct. 31.
Analysts said it is rare to see a bank place its brand on to one of its asset management units considering most are moving in the opposite direction.
"Naming the funds after a bank is acceptable, but considering some of the problems, banks have tried to divorce themselves from their asset management units," said Geoffrey Bobroff of Bobroff Consulting in East Greenwich, R.I.
Lee said Royal Bank of Canada's strong track record makes it the exception.
"As opposed to many banks, we have the backing of a very strong financial services company with a strong brand," Lee said.
"RBC connotes strength. The decision to change our name indicates to investors that we are strategically significant to the bank."
Royal Bank of Canada has created "an asset management" culture within the bank, Lee said.
"What is important, more important than the name on the door, is creating a culture that incents people," he said.
"We are not being brought under the corporate and management structures of the bank. RBC has proven that they are strong at operating asset management businesses."
Royal Bank of Canada bought Voyageur in 2001. Since then it has increased assets under management to $40.5 billion, from $14.1 billion at Dec. 31, 2000. During the first nine months of last year, Voyageur increased assets under management 22.7%.
Lee said the new brand is already helping his unit develop assets this year. He said RBC Global Asset Management U.S. is in a "strong growth mode."
"We are developing relationships through Royal Bank of Canada and because of the RBC brand," he said.
"Many banks in Canada, particularly RBC, have weathered the financial storms wisely and come out in really good shape."
Bobroff said the branding question is something that most banks struggle with.
"In the United States, there are really only two brands when it comes to wealth management — Vanguard and Fidelity — the rest is awareness and that is different than branding," he said.
"Whether they are named Voyageur or RBC, I am not sure there is much of a difference in terms of awareness. I think they are going to do more than rename themselves to generate assets."