Citi PB and the grocery store

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Julie Koo, Citi’s managing director and head of investment management sales, uses the analogy to give a sense of how the bank organises its product shelf.

Koo likened banks to supermarkets: some are large with a broad selection of goods, some are smaller with more specific products.

“Our store doesn’t have the obvious aisles you might find in a large supermarket. When you walk into a typical store, you have bread, meat and frozen food. Our store aisles are designed around investment themes.”

The bank currently arranges its product shelf into four investment themes, which are “core income strategy”, “emerging opportunities”, “transport and e-commerce” and “exploiting volatility”, according to Koo.

The products in the themed categories range from mutual funds and hedge funds to less liquid private investments.

The themes are determined by the bank’s global investment committee with the input of its regional strategists, Koo said, noting that the themes do not change often.

“But they will shift, much like you will see in grocery stores as seasons shift from summer to autumn or even the holiday seasons and you will notice different products being available and different aisles being created to cater to those seasons.”

However, Koo noted that since the bank is not a large supermarket, it does not have “hundreds of the same types of products” on its shelves, which means it doesn’t add a lot of new things all the time.

Taking private equity and real estate as an example, Koo said that the bank looks at around 500-600 deals a year. That is narrowed down to around 300, which are examined more carefully. Out of the 300, only 12-15 offerings will be made available for clients in any given year.

The figures are very similar with the firm’s hedge fund offerings, she added.

“The flipside to that is once you are on our shelf, we really do stand by the product and give it a lot of attention and make sure that the clients understand the offering.”

In an earlier interview, Koo provided some color around the criteria she sets for evaluating products for the bank’s platform.

“Most important is getting a clear understanding of what that fund aims to deliver,” she said. “Lots of products have clever titles and you look underneath and it’s something pretty obvious.”

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