Trying to seduce with a difference

OPM operates a fund-of-funds approach, aiming to offer investment channels that complement those of its peers and that advisers can easily explain to their clients, writes Neal Underwood.

Hancock says he also likes the processes and asset mixes on the two funds. “The manager [Yousefian] seemed on the ball and up to speed,” he says. “OPM is the default choice for us – we always include a position in the Fixed Interest fund in our portfolios. It’s handy for clients who don’t have large amounts of assets – even better than a strategic bond fund because it’s a fund of funds. You get the diversification of manager and approaches as well as assets. It’s a natural progression for a discretionary fund manager to move to funds of funds for a wider client base. Those two funds fill a gap – there are not many people doing it.”

The Property fund dynamically allocates between direct property and property securities, another feature which appeals to Hancock. “It solves all our property problems. We don’t want to have to switch every six months. We like to allocate to an area, then a professional full-time fund manager is far better at making those decisions than we are. We give the day-to-day decisions to the fund manager.”

”We won’t launch anything if we don’t feel it has a uniqueness”

Hancock also highlights the good service he has received from OPM. “The manager came and talked us through the process, and we have regular contact on the phone.” Michael Fitzroy of Pritchard stockbrokers also describes OPM as helpful. “You can always speak to them. And they will come and see a client if they are big enough.” He speaks highly of Richard Carswell, business development manager, who is good at keeping them informed of developments.

Fitzroy, like Hancock, is a fan of the OPM Fixed Interest fund. “We like the fact it pays a consistently above average income on a monthly basis. We can always see what the underlying stocks are and it has good performance. A lot of fixed income funds are just corporate bonds or just gilts. They can invest in what they want – they have a pretty open hand to be able to do what they want, which makes a difference. If you invest in the Investec, or Artemis, or Schroders fund you are tied to one fund. In this fund you have all of these and seven more. It’s a very simple way of doing it but it’s got to be well managed. They seem to be able to do it.” Fitzroy also likes the Oeic structure of the fund, which he says simplifies pricing.

“As a manufacturer we are providing a range of funds to the IFA community for them to be able to allocate for clients to meet their risk/reward criteria,” says Yousefian. “We work closely with the IFA market. With regards to the Retail Distribution Review [RDR] we’ve been actively involved in consultation. We see RDR as an opportunity to support IFAs; we have a range of products IFAs can feel comfortable with.”

Yousefian says any additions to OPM’s product range would be likely to take one of two forms. “We either add funds with new risk profiles or we complement the existing range. We’ve been very keen to make sure we work closely with the IFA community. We’re different – we’re genuinely multi-asset. The fund of funds legal structure has evolved quite nicely over time, but the key is having the intellectual property to make the most of that. The main focus of our conversations at the moment with IFAs is taking two different lines: continuing to offer definitive strategy funds – complementing that with a global ex-UK fund would complete the range, or a stable of new funds where they’re effectively managed with different risk/return profiles. So possibly a new suite of products to complement the existing range or a new range altogether. It’s interesting. The closer we get to RDR the more we will see how it develops. We see RDR as an opportunity rather than a threat.”

Yousefian argues that the days of relative performance are numbered. “People are now looking at total return and absolute return.” He also says people are far less accepting of absolute returns with huge amounts of volatility – they are looking for smoother returns.

OPM intends to remain focused on its main distribution channel – IFAs. “We have concentrated on brand awareness and the availability of the funds on major platforms,” says Yousefian. “We’re keen to continue to maintain our platform availability.” OPM’s funds can be found on a range of platforms, including Cofunds, Transact, Nucleus, Ascentric, Sipp Centre, Raymond James, Standard Life, Skandia, Axa Elevate, Winterthur and Novia. He also says the platforms offer an efficient service to their clients. “We’re very much keen to make sure we have a range of products IFAs can use,” he adds.

As well as continuing to support the adviser market, Yousefian also, naturally, wants to grow assets under management. Any products must be “refreshingly different from our existing offering,” in Yousefian’s words, and able to demonstrate performance. “Otherwise it would be a waste of time launching them. The angle we’re working on at the moment is being different from competitors. There appears to be a demand for risk-controlled funds with specific parameters where the IFA can easily explain it to clients.”