What has been the impact of Richard Buxton joining Old Mutual Global Investors?
The numbers speak for themselves.
There is around £1.5bn in the UK version of the fund that he manages and his total assets are in the region of about £1.7bn.
That’s the amount of business that Richard has brought in over the 12 months that he’s been in situ at Old Mutual Global Investors, which is obviously, from our perspective, fantastic and is ahead of what we targeted for Richard for this period.
We’ve been delighted by the response from the market, by clients alike in terms of recognising the considerable investment talent that Richard and his team have brought to Old Mutual and that’s been recognised in the fund flows that we’ve seen.
There have been some other intangible benefits of Richard joining the business, which is the increased profile he’s given us in the marketplace, particularly around the time of the announcement.
It probably caught the market by surprise that we’d talked about what our ambition was for Old Mutual Global Investors but this was the first real, tangible piece of evidence that we were bringing in a manager aligned to the ambitions of the group.
Our stated desire is to build up an investment-led business with the best talent that we can recruit.
Richard has just got back from a week in Hong Kong and Singapore.
Clearly the main profile is in the UK but as I’ve been travelling around the world, even in Latin America, they knew of the move and saw that as a very positive sign for our business.
In Asia, they’re interested increasingly in UK equities, which was why Richard went over there as well.
We’re hoping that by the end of the year Richard’s fund will be registered for sale in Hong Kong.
His fund is already registered in Dublin which means that we can distribute in Latin America fairly simply.
Are you planning to recruit more high-profile fund managers?
In the past four weeks we’ve announced Ian Ormiston to run European small caps. Ian’s already making a significant contribution to this business.
Then there’s Josh Crabb, a manager who does enjoy profile across client segments but just as importantly, he’s got the right process performance and the right cultural fit with what Old Mutual Global Investors are trying to achieve.
It makes sense to recruit managers with strong track records and repeatable processes that we believe in.
The key bit for me is that cultural fit with the organisation. So whether it’s high-profile or not is kind of immaterial – it’s whether these people fit into the fact that OMGI is in a growth phase at the moment. It’s grown spectacularly in the course of the past 18 months or so.
We’ve recently launched an African equity fund using Old Mutual Investment capability in South Africa.
So we haven’t brought in anyone to run that fund. We’ve actually launched that ourselves.
We also launched a Monthly Income High-Yield Bond Fund run by Christine Johnson and her team.
Here we’re taking investment capability, seeing where there’s a gap and saying, ‘Well we can run this internally because Christine’s got a fantastic track record in the time she’s been with us.”
What is your job remit?
I’m head of global distribution.
We took the decision last year to combine sales, marketing and product into a single business unit called distribution.
There were a number of reasons for doing that. I think it’s so that everyone reports into a single source with a single overall strategy and objectives which we all own, whether you sit in marketing, product or sales.
It allows much closer collaboration across the business and works at a very high level in terms of our growth targets and our AUM targets across the years.
So there’s just an appreciation of what the wider business is trying to achieve that people can buy into and work towards, rather than working in individual silos with their own individualised and departmental targets and objectives.
I think we’ve got a very open, collaborative distribution unit now that we have got everyone reporting into one place.
What is the geographical spread of the business?
In the current environment there are common themes and client needs, irrespective of where clients are based.
Demand for income and challenges in retirement being two good examples of those that have common resonance around all the regions in which we distribute.
Our home market is the UK, and we have distribution capability in Europe, in US offshore, in Latin America and in Asia currently.
And South Africa?
We distribute in South Africa via the entities of Old Mutual in South Africa.
So I don’t have a South African sales person specifically down there but we work with Old Mutual Wealth in South Africa and the other South African businesses to distribute our funds to that region.
Clearly their brand and infrastructure is so strong it makes sense to leverage what they’ve got down there.
How much time do you spend outside of the UK would you say?
We have focused very heavily on Asia in the course of the past 12 months, which was around transforming our Asian business.
We brought in Carol Wong last year, who’s building her team in Asia as head of our Asia distribution business, and we’ve now added firm management capability in Asia through Josh Crabb who joined from BlackRock this year.
He and his analysts, who are currently based in London, will move to Asia probably in Q1 next year.
Then we’ll have increased sales and marketing resource, risk and compliance and product management capability in Asia.
So the Asia business has grown from being a sales hub of the old Skandia Investment Group into a business in its own right with asset management, fund management, trading and analytical capabilities and then all of the support function around its sales, marketing, and product.
That infrastructure wasn’t in place previously. So that’s meant I’ve spent a disproportionate amount of my time in Asia over the course of the past 12 months.
How quickly has the business been growing?
We’ve done an awful lot in a very short period of time in terms of profile and growing the business.
We rebranded into Old Mutual Global Investors at the start of last year and in that time it has grown from £12bn to £17bn of assets.
It’s gone from being outside the top 20, according to the Pridham Report (which monitors fund sales and asset trends in the UK), to second position last year.
We’ll be inside the top five again this year, so establishing ourselves at the top table in the UK in terms of wholesale presence.
We take great comfort by the fact that we’ve gone from inside the top 20 to inside the top five in 12 months.
Part of that is down to Richard Buxton but actually Richard’s is not our best-selling fund, which again surprises a few people, nor is it our largest fund (UK Alpha).
Which are your best-selling funds?
Our best-selling fund at the moment is the Global Equity Absolute Return Fund, which is now over $2bn in size.
Two years ago it was less than $50m in size. US funds have done particularly well in terms of net sales over the past 12 months.
The UK Equity Income Fund has grown more than double over the past 12 months.
We’re in a strong position in that we’re not dependent on a single fund or a single strategy in order to grow.
We’ve obviously got very strong UK equities and fixed income desks.
If you look at our global equities team, we’ve got the multi-asset business run by John Ventre.
That’s got £4bn or £5bn invested in it, a long-term track record with funds like our risk-targeted Spectrum range, which continues to be very popular and we’re launching new funds for John and his team to manage as well.
So we’re in the high-alpha, multi-manager and multi-asset space, and I think it’s really important to serve all parts of the market going forward, whether it’s UK or international.
What are your priorities going forward?
The UK is our home market.
That remains a key market for us, both in terms of assets and cash flows and resource.
We’re looking at other distribution opportunities in the UK as well.
The other key market for us is Asia, with a new head for that region who’s closely aligned to the client segments that we’re targeting most keenly.
Then with product specialists and product management capability in there as well, to make sure we’re as close to our clients in Asia as we possibly can be in bringing the right products to market.
Then we announced in October that Allan MacLeod has joined us as head of international distribution.
So if you think about our distribution model, we have UK, we have Asia and then Allan has come in, reporting to me, managing international dis-tribution and that is everything outside the UK and Asia.
So primarily at the moment that means the US offshore, Latin America and Europe.
Can you tell me about any new markets you are planning to get into?
To be frank, we’ve got to grow significantly in Europe.
We’ve got some great funds and propositions for Europe but we need to increase our resources there considerably, which is one thing Allan’s looking into for us at the moment.
In Latin America, we’ve recently increased our resource, so we’ve got presence in the US offshore market.
The Middle East is an interesting one for us.
We do already have some presence in the Middle East, working with our Old Mutual International colleagues, but it’s not been a focus of our distribution historically.
Allan’s got that experience and breadth of knowledge to plug the gaps and help us build that international piece.
Of the new markets, the Middle East is an obvious one for us, maybe broadening our distribution reach in Asia beyond the three core jurisdictions in which we operate at the moment, which are Hong Kong, Singapore and Taiwan.
It could be a potential priority for us but there’s enough to go at in the European market and the US and Latin America in the interim, which is why Allan’s been brought in.
I think he’ll do a terrific job for us.