What about the rest of the world?
We have an Asian operation that is in its infancy and it is more institutionally focused at this moment in time. We are exploring other avenues where there are opportunities, including the US.
We continue to look at the Middle East and Israel. Israel is a small but lucrative market, dominated by pension funds, insurers and a small number of discretionary fund managers. It is an interesting market.
How about outflows and sales?
Our outflows in August were better than in July and June because, pre-Brexit, people were taking risk off the table. Then in the wake of Brexit we had general panic. People did not know what to do. The pre-Brexit pipeline effectively evaporated.
We are now starting to see that pipeline come back, but in a different sense. We have had more interest in investment grade exposure in the six weeks post-Brexit than we had in the three months prior to the vote. We are also starting to see interest in multi-asset income again.
As we enter the final four months of this year our focus will be on outcome, which is about absolute return. Our new Global Equity Market Neutral Fund will be a focus for us.
In terms of the top end of the market, we will be focusing on building blocks, namely investment grade and high yield, as that type of market is sitting on a lot of cash. Talking to clients, those in London have on average early teens exposure to cash, and in Switzerland it is in the late teens.
Being in cash is not a good thing as we get into the final four months of the year. In continental Europe paying to put money on deposit is nonsense. So, I think you will see some of that money put to work.
For the broader market we are going to focus very much on income because if there is a degree of uncertainty, the one constant is people’s need for income. LW
Biography
Steve Kenny joined Kames Capital in 2001 and became director of wholesale business in 2002. Prior to that, he worked at a national employee benefit consultancy and a life company in the national accounts team, before moving into mutual fund sales in 1996. He has more than 27 years of experience in the financial services industry.
