Elsewhere, roughly $330 billion of RBC GAM's global AUM, ex-BlueBay, or more than 85% of the total, is invested in Canadian assets. BlueBay, by contrast, is managing $26.9 billion for clients in Europe; $17.7 billion for Japanese investors; $16.8 billion for U.K. clients; $10.9 billion for Canadian investors; and the rest in Latin America and Asia-Pacific.
Combining RBC GAM and BlueBay's U.S. fixed-income exposures to create a $51 billion pool of assets was a key step toward the two managers "achieving our longer-term aspirations in the U.S.," Mr. Gerth said.
"We needed scale and we need strength in our (investment) proposition" and by bringing on RBC's investment professionals, "we're able to use the BlueBay process, how we manage money, and apply it to a greater base," he said.
While BlueBay contributed roughly $4 billion in U.S. fixed-income assets to RBC GAM's $47 billion, it was Andrzej Skiba, BlueBay's head of U.S. credit, who got the nod in November to lead the combined business as RBC GAM's head of U.S. fixed income.
Even as BlueBay reported net inflows of $11 billion for its fiscal year ended Oct. 31, Mr. Gerth said the need for scale will become more pressing going forward as money managers struggle to keep pace with long-term structural changes in areas such as technology, ESG and regulation.
"The demands of our clients on ESG are going up at a very rapid pace and you're not getting paid more to embed ESG in what you're doing. It's table stakes," he said.
That leaves firms like BlueBay "running faster and faster just to stand still."
Likewise, when it comes to technology — a key ingredient for the financial institutions/wholesale business segment Mr. Gerth sees as BlueBay's primary growth segment going forward — RBC spends "infinitely more … than I could ever dream of spending." The closer BlueBay's relationship with RBC GAM, the more efficiently it can tap into that technology, he added.
So if money managers acquired by a financial conglomerates are typically keen to retain their independence, Mr. Gerth instead said he sees the need to move beyond cooperation to "the next step, which is to literally bring the businesses together."
"Instead of taking the approach that I'd rather keep RBC away, I look at it as, if I can get closer, we can make the aggregate business — both RBC GAM's business as well as BlueBay's business, the combined entity — a much stronger competitor and ultimately do a better job for our clients," he said.
The threat that could pose to BlueBay and RBC GAM's respective investment cultures, meanwhile, isn't a big concern, said Mr. Gerth, noting their growing alignment over the past decade as well as the complementary nature of their offerings, which leaves little overlap between BlueBay's fixed-income culture and RBC GAM's equity culture.
One of the next areas of focus in bringing BlueBay and RBC GAM closer together will be the Japanese market, where BlueBay manages more than $17 billion now in credit mandates for local clients.
It is BlueBay's second-biggest market and "as we bring BlueBay and GAM's businesses together … I see an opportunity for us to introduce some of (GAM's equity strategies) in Japan," including Asia equities, emerging markets equities and global equities, with a deep ESG theme, Mr. Gerth said.
For the latest year, meanwhile, BlueBay's credit strategies have continued to attract strong demand from Japanese clients, said Ken Yoshida, a Tokyo-based partner with BlueBay who has led the firm's sales efforts in Japan since before it opened its office there in 2005.
For the current year, BlueBay has garnered record inflows of more than $2 billion from Japanese clients, reflecting sustained interest in rebalancing out of equities and into bonds, as stock markets globally have continued to rise, Mr. Yoshida said in the same interview with Mr. Gerth.
Roughly 40% of BlueBay's Japanese client money comes from pension funds, with wholesale business accounting for the rest, Mr. Yoshida said. And while the great bulk of BlueBay's pension money comes from corporate clients, the firm was hired this year by a big public pension fund as well, he said.
Mr. Yoshida declined to name the client. Japanese public pension funds provide a list of the money managers they've hired, with the amounts allocated to each, only once a year in July, when they announce their results for the fiscal year ended March 31.
Mr. Gerth, meanwhile, said BlueBay will continue to look to Japan as the centerpiece of its Asia-Pacific strategy, despite opportunities to be had in the fast-growing China market.
"China is a great business but right now it can't be a great business for us because I can't properly staff up to support it," he said.
"I would rather keep our attention on our Japan market, where we believe we go from strength to strength," as well as Europe, where BlueBay can "continue to go deeper," Mr. Gerth said.