Friendships founded over the years since he forsook property for the City have been key for Simon Hillenbrand, who can claim much of the credit for ‘waking up’ a sleepy Henderson.
Simon Hillenbrand strikes me as ‘a people person’. He is affable and accommodating – taking the sun-facing seat during our interview, amiably pressing a Werther’s Original from the bowl in reception into my hand at the end of our meeting – so it is not surprising the words ‘people’ and ‘team’ pepper our conversation. Indeed, Hillenbrand cites the friendships founded at the firms at which he has worked as the cornerstone of his career.
As is the running joke with many in financial services, Hillenbrand’s career in the industry came about “by accident,” as he originally trained as a chartered surveyor. However this was during the last full-blown recession and the property market was slow. Hillenbrand had taken an interest in the city since his college days in the late 1980s, in particular the stockmarket crash of 1987 that was exacerbated in the UK by the hurricane that hit the Friday before ‘Black Monday’.
“I took a view on the economic climate and decided I wanted to look at the city,” he says. “There was always stuff happening in the city. I was at college in October 1987, when the hurricane and market collapse happened. I started to follow the city and was studying economics as part of my course.”
After taking a year out to learn French in Toulouse – “a crazy part of the world” – Hillenbrand called time on his slightly more hedonistic pursuits, returning to the UK in October 1993 and landing a job at the then leading investment bank Morgan Grenfell the following June.
“It was an incredible time to join. Morgan Grenfell was the biggest and fastest-growing institutional fund manager in London. Adrian Frost, Charlie Curtis, Ben Wallace, Charlie Wilson were there – a lot of good names. Graham Kane was my boss and the team I worked with have gone on to do great things – and some are working here, ha ha. Greg Jones and Graham Bowden are here now. It was a good team and a really excellent time to work for a firm like that.”
Having spent a year working on unit trust accounts Hillenbrand realised it was sales that interested him, and in 1995 he was taken on full time by managing director Jonathan Cook as a broker services executive. However it was not long before the group was rocked by controversy in the now infamous Peter Young scandal, when star European manager Young was accused of fraud, although he was subsequently deemed unfit to stand trial.
Despite the fallout from what Hillenbrand describes as “the biggest scandal in our history”, which included the resignation of five managing directors and the rebranding of the company by parent group Deutsche Bank, Hillenbrand stayed with the firm until 2000 when he left to join Invesco as a regional sales manager out on the road.
But it proved a bumpy road – shortly after Hillenbrand joined Invesco the tech bubble burst creating a “pretty challenging” environment for the firm, which had previously seen its European growth and small cap funds flying off the shelf. Invesco merged with Perpetual later that year, which Hillenbrand says gave him an insight into how mergers should and should not be done, no doubt preparing him for his time at Henderson.
In 2002 Hillenbrand was reunited with Greg Jones who had joined New Star – then a fledgling company just 12 months old.
“I thought New Star sounded pretty exciting – I liked the entrepreneurial aspects. They were open about what they wanted to achieve. I needed a new challenge and there were exceptional people at New Star.
“I joined as a regional sales manager. It was exciting because it was a start-up company. After the tech bubble burst people were keen to re-engage, and New Star was exciting and vital. Plus it brought me into contact with new people, lots of whom I am in touch with today. This industry is always changing but you can work with people who are consistent. It has made a difference to how my career has gone.”
I have to ask what it was like working for New Star founder John Duffield – who was famously taken to an employment tribunal by ex-employee Patrick Evershed over alleged bullying at the firm?
“I have not seen him since I left but he was someone who had a keen grasp of business and who knew what he wanted to achieve.
“When Phil Wagstaff left in 2007 I was promoted to managing director of UK sales, so I had a lot of time with John. Working closely with him I learnt a lot about him and the business. His attention to detail was second to none.
“Politics were kept to a minimum at New Star and we were left to get on. It is the sort of experience everyone should have. Nowadays business is done differently, but New Star was a creature of its time. We had fun and we were successful, but the biggest takeaway for me was the people.”
However Hillenbrand describes New Star as ultimately “a credit crunch case study.” “It was undone by falling markets as it had too much debt. It was the perfect storm.”
In April 2009 New Star was bought by Henderson and in October of that year Hillenbrand joined Henderson as head of UK retail, reporting to Mark Skinner, head of European retail.
“Andrew Formica was appointed chief executive of Henderson in 2008 so the New Star deal was the first thing he did. He was keen for Mark Skinner, Stewart Cazier, Greg Jones and me to bring our distribution – I want to say ‘magic’ – to Henderson. So we all came across to recreate what we had at New Star.
“It was a business of coming in and revitalising Henderson’s UK business, which had gone a but sleepy at that time. Henderson was very conservative and quiet in the UK and needed waking up. We were charged with that.”
Having spent 18 months merging funds and “getting [the combined business] into shape,” Henderson trod the acquisition trail once more with the purchase of Gartmore at the start of 2011, which Hillenbrand says was “far more meaningful across the fund floor [than the New Star takeover].”
“New Star was more about distribution while Gartmore was more about fund manger talent,” he says. “The group’s absolute return fund and European equities were a big boost. Gartmore was a game changer. Phil Wagstaff had done a lot to transform Gartmore to a more buzzy, retail-focused group than it had been. New Star and Gartmore shared the same philosophy, but it was about trying to find common ground and find their new identity as Henderson. It was our job to assert ourselves as a UK brand. The first time I met Peter Hargreaves he referred to Henderson as ‘a success story of the 1980s’. That is what we are aspiring to regain.”
In June this year Henderson announced a deal with the Teachers Insurance and Annuity Association College Retirement Equities fund (TIAA-CREF) to combine their European and Asia Pacific-based property businesses to create a new global real estate investment management company – TIAA Henderson Global Real Estate, the aim being to simplify the business and enable the group to focus on its core strengths.
While merger and acquisition activity has been prevalent in the industry this year, Hillenbrand says there are no further takeovers on the cards.
“We are where we need to be in the UK,” he says. “After the New Star takeover we said to the board there will be a lot of consolidation in the industry, but we are the vanguard of that shift. Post-RDR investors’ buying habits are changing and people are less tolerant of underperformance. There will be more fund mergers and M&A – I cannot see that stopping with people looking closely at revenues and margins. We are grateful to our clients who put up with change from us, and the onus now is on making the most of the opportunity.”
So how has the combined group evolved from three years ago?
“We are in a different place to where we were three years ago. There is a lot more energy, we have great products and good performance. The property deal also provides an opportunity to focus on our strengths, which are global equities, global fixed income, European equities, multi asset and absolute return. We are a lot more focused compared with the Henderson of old. We are building to the next stage which started this year.”
Indeed, this year marks something of a turning point for Henderson, having completed the integration of New Star and Gartmore last year. Hillenbrand says the group’s key focus now is on enhancing their credentials as providers of income solutions, such as global equity income (the group has a £635m fund) and the core multi-asset solutions (four multi-asset income funds have so far been launched over the past year), as well as absolute return and wealth protection strategies.
He adds that the post-RDR environment “offers some exciting opportunities, particularly in the restricted advice space,” and as such they will be spending time pushing ahead with the progress they have made so far working with their strategic partners Sesame Bankhall and Intrinsic.
“We do not want to be tied to one distribution channel. So we have our component funds and strategic partnerships with Sesame and Intrinsic. We have a foot in each camp. Our strategic partnerships are going well – we were right to think holistically.”
Meanwhile more familiar faces have appeared at Henderson this year in the form of Sam Mettrick, head of advisory, and Rob Page, head of global marketing – both of who are New Star alumni.
“Both Sam and Rob share our ambition to succeed,” Hillenbrand explains. “In addition I would like to think their respective decisions to join were at least partly down to wanting to work alongside some old friends from New Star days. We were a good team there and we are passionate about doing a good job here too.”
Henderson currently has £68.8bn in assets under management overall, while the UK retail arm is in about 12th or 13th position amongst its peers, Hillenbrand says. He adds that in five years’ time it would be “great to make progress and be knocking on the top five for assets under management”.
He adds: “I want to work at a place where clients can trust you and see you as consistent in your approach. This culture existed at other places I worked, and I want to emulate that here. It does feel like a new Henderson. I would like to be running a successful team, at the forefront of distribution with good product, against what could be a challenging backdrop.
“But really, I do not believe in planning five years ahead. What is it they say? Predictions are very difficult, especially around the future.”
What would our readers be surprised to know about you?
Some people think I look like Daniel Craig.
What was your childhood ambition?
To be a secret agent.
What is the first thing you would change about financial services?
I would make it easier for the general public to understand. Also there are lots of good people in financial services who are committed to doing their best for clients and this needs to be communicated more effectively.