If we can go to financial advisers, both in the UK and elsewhere, and we have relevance, it does not matter how they segment their clients, through funds, unit portfolio services or bespoke fund management.
We were an early adopter in 2009 of the idea of risk targeted-type funds and outcome-orientated investing, which means managers try to run money within a risk tolerance level, for a given outcome, over a given period of time.
How are you shaping the international business in the wake of the UK’s vote for Brexit?
Part of launching the Luxembourg funds was to ensure we had a European base should we need it. This is a very long-term strategy and may well involve other international markets.
In relation to Europe, we are not expecting any dramatic changes for at least two years. What is the worst that could happen, that we have to put boots on the ground in Luxembourg? We can do that, it is not a problem. We are not a fly-by-night firm, we are there to grow assets internationally.
Alternatively, we might have to run the money from a European base. I think that is unlikely because to remove a contractual obligation between a fund and its investment adviser would be quite a tough thing to do.
However, if that happens, it would not be a major issue for us.
I am not trying to build another asset management business of £40bn. My role is to make sure we are a significant contributor to Rathbones Plc, but do not overtake the wealth management business. It would change the nature of the company.
I am trying to build a business with good critical mass, that is profitable but first and foremost is generating great returns for investors. For instance, if we reach capacity in one of those funds, we will not hesitate to shut it. In today’s world, if you are an alpha manager, which is what we are, that has to come before anything else.
Who do you see as your main competitors in the unit trust space?
There are two ways of viewing competition. Do I view myself as a competitor to M&G? No, I do not. We are a specialist investment management house. We are not trying to be all things to all people. We believe in doing what we do well. It depends on the mandate as to who our competitors are.
In the equity income world, we are up against businesses such as Artemis Fund Managers and Invesco, it is one of the more competitive areas.
If you go into global growth, the competitor set is completely different. For ethical bonds, there are few if any, maybe Kames Capital, there as a competitive set.
It is dangerous to say, ‘I want to be like Fidelity, I want to be like X, Y and Z.’ An investor needs to know you are serious about what you do and that if they put their money with you, you are going to be there in 15 years’ time. They need to know you are financially stable and have enough resources.
I believe the brand itself is becoming less important because we are dealing with more and more professional fund analysts and fund buyers, particularly in the wholesale world. The idea that you are known on the street is less important than being known to financial analysts.
Where does your Jersey office fit in?
Jersey fulfils two functions. One is local, domestic, asset management, which is appropriate for non-doms with offshore assets they do not want to repatriate to the UK. By the same token, there are those clients who, although they want to have their assets held in a Jersey domicile, they actually want them run from London. We are able to do that as well.
So there are two aspects to Jersey, one is the administration of accounts and the other is the management of accounts.
Typically, the kind of clients we have in Jersey, if they are not trusts, tend to be internationally mobile. We see a lot of people moving to and from the US, for example, which is why we hold a Securities and Exchange Commission licence. The idea is to be flexible enough that clients retain their relationship with Rathbones.
