Richard Buxton’s promotion to chief executive of Old Mutual Global Investors is a giant task and he needs to surround himself with a strong team, say experts, as the fund manager reassures clients his funds won’t suffer.
Buxton has been appointed as chief executive of OMGI in a management shake-up, replacing outgoing chief executive Julian Ide. The shake-up also saw changes to the Old Mutual Wealth and Quilter Cheviot teams.
However, Buxton has assured clients he’s not going to lose focus on running his funds.
“Investment remains my first passion and priority – and I would not have accepted any additional responsibilities which would compromise or conflict with my ability to invest on your behalf,” he says in a letter to clients.
Warren Tonkinson has been promoted to managing director of OMGI, a newly-created role, to aid with running the business, which Buxton says is key to the success of his appointment.
“[Tonkinson] will work alongside me focusing on key non-investment areas of the business, ensuring high-quality resources are devoted to delivery of products and service to the high standards to which we aspire,” says Buxton in a client letter.
Buxton says he will take on an “investment leadership” role, focusing on having the “best people, products, performance and service for our clients”.
Peter Toogood, investment director at City Financial, says the move is positive for OMGI to have an investor at the helm. “Warren is very capable and will be able take the strain on the non investment related functions,” he says.
However, managing a business and managing money take different skillsets, says Dennis Hall, chief executive of Yellowtail Financial Planning. “It probably appeals to the ego, I’m not sure it appeals to someone’s particular skillset.”
Time will tell the impact that Buxton’s new responsibilities will have on fund performance, says Adrian Lowcock, head of investing for Axa Wealth.
“From the point of view of his day job, he knows that very well and is very experienced. The challenge is the new responsibilities as chief executive, how does that impact on his time management and his ability to do the job and the distraction it creates,” he says.
It will be years, rather than months, before investors can tell the impact of the move on the UK Alpha funds run by Buxton, says Lowcock. Buxton’s investing style means he can have long periods of underperformance, meaning it will be hard to determine the effect of the move, he says.
“It will be over years, as his natural style means there could be period of underperformance that could last a couple of years anyway. I think Buxton will recognise his ability to manage the fund and will act on that sooner rather than later,” he says.
However, a dual fund manager and chief executive role has been seen to work before, including with the likes of Edward Bonham-Carter at Jupiter Asset Management, Gervais Williams at Miton, and Euan Munro at Aviva Investors.
One advantage is that Buxton has always emphasised the team behind him helping to run the funds.
“The way he manages money he is not a one-man-band act, which gives a degree of comfort,” says Jason Hollands, managing director of Tilney Bestinvest. “We will be keeping an eye on what it might mean and whether there is the potential for him to be a bit stretched.”
Buxton reiterates this team approach in his letter to clients.
“I will continue to sit amongst my UK equity colleagues, engaging with them and with companies we invest in on a daily basis. As I have done for many years, I trust their judgements when I am not at my desk,” he says.
“This is absolutely a flagship product for Old Mutual, so Richard and the whole team at Old Mutual will be acutely aware that there must be no loss of focus,” says Hollands.
The shift in management is likely to signal a shift in focus for OMGI, which looks very different now to five years ago when Ide took over, says Lowcock.
With a fund manager leading the business, Buxton is more attuned to the needs and demands of managers, and what makes a successful fund manager, he says.
“That could well set the business up for next phase of development,” he adds. “It could be part of attracting further big name fund managers and creating a culture where fund managers can thrive.”