The challenge Alliance Capital of New York faces is not to move into, but to expand its foreign presence, said Kurt Schoknecht, recently named director of Alliance's $25 billion offshore business. The challenge is maintaining the company's international momentum and forging additional new international partnerships, including in emerging markets, he said.
Schoknecht has had a lifetime of international experience. In 1968, as a sixteen-year-old, he spent a year in Italy as a high school foreign exchange student. In 1977, Schoknecht earned an MBA at Stanford University with an eye towards international business. That same year, he joined Citibank as an international banker stationed in London and spent the next six years of his career traveling throughout Europe, particularly in Germany and Italy.
Now, as the head of Alliance's international business development, Schoknecht has a keen interest in the potential of those markets as well as those of Spain, France, the United Kingdom and Scandinavian countries for retirement savings products, he said. However, Schoknecht is also interested in developing business for Alliance in two middle Eastern nations rarely, if ever, mentioned by mutual fund executives - Bahrain and Saudi Arabia.
He is also interested in the Japanese market, as well as in India, Singapore and Hong Kong, he said. He is also interested in many Latin America markets, including Mexico, Argentina, Brazil, Venezuela and Chile.
"They are all important markets," he said. He also wants to look into a number of Caribbean island nations, as well as Australia.
"All of these markets are very interesting in their own ways, and each is poised to grow," Schoknecht said. "Pension programs are privatizing, there is greater access to information, investors want greater diversification, and, of course, the world population is aging. International growth is universal."
Schoknecht will be doing a lot of traveling in his new position, which he accepted in December, having joined Alliance in August. But it is travel that he says he is eager to do.
Alliance can greatly expand its foreign assets under management by finding the right partners, Schoknecht said. For each foreign market, the business model will be different, he said.
Alliance funds are sold in 71 countries, and the firm already has a strong physical presence of local distributors and wholesalers in 21 of them, Schoknecht said.
"Our sales force is highly motivated and is relentless in their pursuit of doing the best for the customer, and in terms of their team efforts," Schoknecht said.
This strong existing presence internationally makes future growth difficult, Schoknecht said. However, it puts Alliance in a stronger position than many other mutual fund companies only now beginning to look at doing business abroad.
Alliance's strong international presence, in fact, is a major reason he joined the firm from Bankers Trust/Deutsche Bank, where he spent seven years. At Bankers Trust, Schoknecht was most recently business manager for the bank's global banking group. He also was the business manager for Bankers Trust's Latin American investment banking division. Schoknecht further was a member of the Bankers Trust client committee, which reported to the chairman of the bank.
Alliance is about to launch a major new international advertising campaign that will emphasize Alliance's "superior investment performance, well-known brand name, size [$368 billion in total assets under management], global presence and superior research and performance," Schoknecht said.
However, Schoknecht is also intent on continuing to listen to consumers in foreign markets, he said. And, he is keen on relationships.
Schoknecht remains in touch with the Italian family with which he first stayed as a foreign exchange student for a year, 32 years ago. His Italian family is always interested to hear about his career, he said.
That brief experience of so long ago has been a major influence in his work, he said.