Lazard Asset Management head of UK third party distribution Tony Maddock on a solutions-led mindset, actionable communications and briefly sharing the sky with a Space Shuttle
Where – and why – are you anticipating demand or fund-flows from UK-based wealth managers and their clients over the next 12 months?
We are seeing some UK wealth managers increasingly open to diversifying beyond traditional, largecap, developed market equities – particularly as they seek differentiated sources of return in a more volatile macro environment.
Japanese equities and US small caps are often viewed as areas of the market that may receive relatively less research attention, which can result in valuations that some investors consider attractive. Emerging markets equity also remains relevant for allocators who want exposure to long-term structural growth themes.
On the alternatives side, strategies such as convertible arbitrage are resonating with allocators who want uncorrelated return streams and downside protection.
At the same time, many clients are reassessing core building blocks within their portfolios. US largecaps remain a common allocation for many UK wealth managers but generating alpha in that space at a sensible fee point has become increasingly challenging.
How are you planning to address and serve that interest?
We have always approached distribution with a solutions-led mindset rather than a purely product-driven one. For us, that starts with investing the time to understand the specific challenges UK wealth managers and their clients are grappling with, and then working collaboratively to explore strategies that may help address those needs in a practical and timely way.
It also means being thoughtful about where we introduce new capabilities. We only bring something to market when we believe we can offer a clear and differentiated edge. The launch of our Lazard Baylight US Large Cap UCITS strategy last year is a good example.
Many clients have highlighted how difficult it has become to generate consistent alpha in US equities at a reasonable fee level. Our systematic approach in this strategy was designed with that problem in mind and has resonated strongly with those looking for a robust, research‑driven solution.
Are you seeing a divergence in the demands of UK wealth managers versus, for example, their peers in Europe or on the institutional side in the UK?
There are always nuances between regions and client segments, but the core requirements are surprisingly consistent. Across the board, investors want confidence that they are allocating to investment teams with a clear and differentiated alpha edge, supported by a transparent, disciplined process they can trust to deliver results in a reliable and repeatable way.
As a business, how do you define ‘alternative’ and ‘private’ assets and to what extent should asset managers be looking to service investor demand here?
I see alternatives as strategies that deliver returns with low correlation to traditional equity and bond markets – which includes hedge fund-like approaches such as convertible arbitrage, as well as real assets and certain credit strategies. Private assets are investments in companies, infrastructure or projects not traded on public markets, typically with longer lock-up periods.
Investor demand is growing, but access and suitability are key. For wealth managers, the challenge is to balance the illiquidity premium with client liquidity needs. There are ways to bridge that gap – for instance, through listed infrastructure, which can provide exposure to essential, long-duration assets, such as transport networks and utilities, within a liquid, transparent vehicle.
Listed infrastructure offers many of the diversification and inflation-hedging benefits of private infrastructure, but in a format that is operationally simpler and more accessible for end-clients.
‘ESG is dead – long live ESG 2.0’ – your thoughts as a distributor, please?
Clients are increasingly regarding sustainability issues as a financial risk or opportunity. We embed sustainability considerations into fundamental analysis where appropriate – for example, assessing corporate governance reforms in Japan. ESG has evolved into a more nuanced, data-driven discipline that aligns with long-term value creation and risk management.
What drives your approach to client communication? And is there a case for focusing on attracting the ‘right’ type of client?
Client communication should be relevant, actionable and rooted in trust – providing insights that speak directly to our clients’ challenges, offering clear next steps they can implement, delivered with transparency and integrity. Our focus is on how our strategies can solve real portfolio challenges.
And, yes, there is a case for targeting the ‘right’ client – that is to say, those who value active management, understand the role of differentiated strategies and are willing to engage in a long-term partnership. This ensures alignment between our investment philosophy and the client’s expectations, which ultimately leads to better outcomes for both sides.
Outside of work, what is the strangest thing you have ever seen or done?
Many years ago, I lived in Florida and once found myself in a light aircraft late at night as a Space Shuttle launch was taking place. Even from outside the 20‑mile exclusion zone, the sight was extraordinary – one of the most remarkable things I have ever witnessed.
May we have two book recommendations, please – ideally, one with an investment connection?
Frankenstein by Mary Shelley: I should have read this years ago but finally picked it up after watching the brilliant new adaptation by Guillermo del Toro. It is a world away from the caricature we remember from 1980s horror films and I found it far more moving than I expected.
1929: Inside the Greatest Crash in Wall Street History and How It Shattered a Nation by Andrew Ross Sorkin: I read this on the recommendation of Peter Orszag, our CEO, who knows the author. It is a terrific read and a timely reminder of how quickly economic confidence can shift – particularly when viewed through a historical lens.
Gazing into your crystal ball, what does the asset management sector look like 10 years from now?
One of the most striking developments in recent years has been the rise of a more informed and far more demanding cohort of do-it-yourself investors.
It may be wishful thinking on my part but I would like to believe this could encourage a stronger focus on financial education in schools. If that happens, we could see this trend continue – which would be a genuine game-changer for the industry and, more importantly, for how well people prepare for retirement.
Beyond that, I think AI is clearly set to influence every level of the sector in ways we probably have not fully imagined yet. The pace of change is only accelerating and I expect its impact over the next decade to be broad, deep and often surprising.
“Distribution starts with investing the time to understand the specific challenges clients are grappling with and then working collaboratively to explore strategies that may help address those needs.
