Initiate Coverage on Major European Asset Managers: Schroders a Preferred Entry Point

We recently initiated coverage on the three largest, separately listed European asset managers: Amundi, DWS Group GmbH & Co., and Schroders. We believe Amundi and Schroders benefit from economic moats, based on switching costs and intangible assets. DWS' long history of client outflows argues against a moat rating. Amundi's captive distribution agreement with parent Credit Agricole lends strong support to its moat rating. The diversity of Schroders' business, with increasing success in noncommoditized products like multimanagement and alternatives supports a moat rating.