Old Mutual Global Investors may still be in its relative infancy having been created four years ago, but it has already seen its assets under managements more than double from £12bn to £29bn, against a background of top level changes.
The asset management division of Old Mutual Wealth, OMGI was borne out of the merger of Old Mutual Asset Managers and Skandia Investment Group’s multi-asset fund range, with Julian Ide then at the helm as chief executive.
A series of changes ensued when, in February 2015, Old Mutual Wealth acquired discretionary investment manager Quilter Cheviot, prompting a reshuffle at the top table and Ide’s departure.
In the newly created investment division of Old Mutual Wealth, Martin Baines was promoted from CEO of Quilter Cheviot to chief investment director of Old Mutual Wealth. David Loudon became CEO of Quilter Cheviot and star manager Richard Buxton was appointed CEO of OMGI, while Warren Tonkinson was promoted to managing director of OMGI to oversee the day-to-day business.
Tonkinson originally joined Old Mutual in 2012 as head of distribution for Skandia Investment Group before transferring to OMGI, having spent 10 years at UBS Global Asset Management, latterly as managing director. He started out as an independent financial advisor at Towry Law, and spent the earlier years of his career at Prudential and Fidelity.
He says the second half of 2012 was spent “putting the business together”, and establishing “very ambitious targets”.
“We were very clear that we wanted to create a leading asset management firm, and that is what we have been doing over the past four years.”
Tonkinson says the firm’s main focus was “improving the strength and depth of the investment proposition”, while allocating money and resources to building the OMGI brand.
“It has been tremendously successful for us,” he says. “We are seeing adviser recognition of the brand and our imagery is recognised in the market place. The brand is a critical element of any asset manager, especially in the current environment.”
Tonkinson says that despite Ide’s departure, the firm’s objectives have remained the same, and the core management team has been in place since 2012.
However, as to be expected, there have been a series of hires over the past four years. Within the first couple of years, OMGI had hired Richard Buxton as head of UK equities and Josh Crabb as head of Asian equities. More recent hires include John Peta, head of emerging market debt, Russ Oxley, head of fixed income (although he has since left the firm due to a difference of opinion) along with other members of the fixed income absolute return team from Ignis, and Mark Nash, head of global bonds and Nick Wall, fixed income portfolio manager, Diego Parrilla, based in Singapore as managing director, commodities, Janus’s Bill Gross, manager of the Old Mutual Total Return USD Bond fund.
As part of OMGI’s plans to boost their presence globally, the firm has also made a series of appointments outside the UK, including Gerard Clancy, head of sales, South East Asia, who is based in Singapore, and Richard Mo, head of China business and Rob Weatherston, Japanese equity manager, who are both based in Hong Kong.
“We have a good track record of bringing people on board and raising assets,” Tonkinson says. “We are getting close to the end of that process; there has been a gradual slowdown in our hiring. But we remain active in the market place.”
OMGI is already making its presence felt more globally; year to date international sales have trumped UK sales, says Tonkinson. Not that the UK sales are to be sniffed at – according to the Pridham Report, OMGI ranked fourth in terms of UK net retail sales in 2015, with £1.9bn. Not bad considering OMGI was outside the top 2020 in 2012.
Tonkinson points to the Global Equity Absolute Return fund, the UK and US equity funds and the multi-asset Cirrilium and Generation portfolios as having attracted the most flows.
“We have seen really difficult market conditions this year, but we’ve handled it relatively well,” he says.
“We are expanding our international footprint. We now have offices in Zurich, Boston, Latin America and Miami and we opened centres in Hong Kong and Singapore in 2016. We are looking at future distribution across Europe.”
Last month the firm appointed Cristiano Busnardo as country head, Italy, who will be based in OMGI’s new Milan branch.
“We now have a strong European sales team which has grown from one person to a team of six,” Tonkinson says.
Tonkinson describes OMGI’s working environment as collegiate and non-hierarchical.
“No one has an office. Not even Richard Buxton. We find that encourages open collaboration. We try to be as communicative as possible and encourage people to be non-siloed and to walk around. Our employees are more engaged and there is a better exchange of ideas. After all, this is 100 per cent a people business.”
OMGI has an extensive range of onshore and offshore funds totalling around 60, but the firm is largely recognised for its UK equity offerings, with Richard Bxuton’s £2.2bn UK Alpha fund an obvious one to namecheck.
“We have seen strong performance across the range,” Tonkinson says. “We are very well known for our strength in UK equities. But we are also strengthening our fixed income capabilities and emerging market debt has performed well following the rebound in performance in Asia.”
The group recently launched the Gold & Silver fund for Ned Naylor-Leyland, who joined OMGI from Quilter Cheviot last September. The fund already has £100m in AUM, and Tonkinson says the firm is now looking into launching an absolute return commodities fund, which Parrilla could potentially run.
Recent fund launches have been structured as Dublin-based ucits funds, Tonkinson says, although this trend pre-dates Brexit and is more related to the firm’s global footprint.
“Investors in the UK are happy to buy ucits funds and they have greater appeal across the global distribution centres,” Tonkinson says. “We expect most of the funds we launch now to be Dublin funds.”
Over the next five years Tonkinson says the plan is a continuation of brand growth, increasing distribution and ultimately driving assets into the firm’s various asset classes.
“We are hoping for sustained growth in assets. We have already seen our assets grow from £12bn to £30bn and we hope to continue that trajectory going forward. It will be challenging, but then it was challenging in 2012.”
Rob Morgan, pensions & investments analyst, Charles Stanley
Old Mutual Global Investors have one of the most well-regarded mid and small cap teams in the industry, and have deservedly attracted a wide following. A team-based approach and a focus on bottom-up research has consistently delivered across the range. Richard Buxton’s move to the group in 2013 completed an enviable line up of UK equity funds, and he now leads the 15-strong UK team. The global equities team, under the leadership of Ian Heslop, uses a proprietary quant-based approach aimed at producing diversified alpha with low volatility, plus there is strength in fixed interest under Christine Johnson and in multi asset investments under Anthony Gillham and Lee Freeman-Shor.
Martin Bamford, managing director, Informed Choice
Old Mutual is a global insurance giant, with its asset management arm offering an extensive fund range for UK investors. The group has suffered from a crisis of identity with advisers in recent years, since the acquisition of trusted brand Skandia a decade ago. The current plans for Old Mutual Wealth to breakaway from its parent firm Old Mutual will add to this uncertainty and make it harder to establish a stable brand in the short-term. One of the benefits of acquiring Skandia was gaining access to their Best Ideas fund, although this has performed poorly in recent years. It’s an innovative concept that appeals to investors, but has experienced inconsistent performance and never really found traction.
Laith Khalaf, senior analyst, Hargreaves Lansdown
Old Mutual Global Investors have recruited some top quality individuals over the years and have a renowned and multi-award winning UK equities team. We have held Old Mutual’s UK small and medium-sized companies team in particularly high regard for a long time now, populated as it is with exceptional investors like Dan Nickols, Luke Kerr and Richard Watts, and formerly Ashton Bradbury, until his retirement. More recently the group achieved a bit of a coup by recruiting Richard Buxton and his team, with Buxton now heading up the investment company as CEO. The parent company is planning to demerge into its constituent business lines, which will no doubt mean interesting times ahead for Old Mutual Global Investors.
£29bn Assets under management
4th Position in terms of UK retail net AUM in 2015
60 Funds in OMGI’s range
4 Years since OMGI was created