We actively market three funds at the moment: the TMI Diversified Assets, Sterling Bond and US Dollar Bond funds, all as sub-funds of Global Reach New Strategies Funds. The TMI Diversified Assets Fund has aroused particular interest.
In terms of how we distribute, we work with introducers. We are looking to build up our network and expand our reach. We don’t have a sales force, per se, within TMI. We look for other people to help open doors, allowing us to talk to people on a higher technical level, meaning IFAs, wealth managers and other discretionary fund management houses have been our focus over the past eight or nine months.
It has been important for us to get our funds accessible through the platforms and the life companies people want to use, and we have been doing quite a lot of work on that over the period. For example, we are now on the list of most of the offshore life companies so we are starting to see the money come in.
Is there one channel that is delivering more at the moment?
We’ve had quite a bit of institutional money come in but the interesting area has been other discretionary fund managers, who have been buying into the TMI Diversified Assets Fund.
There is a particular theme behind that. Fund managers are looking to add in alternative exposures to their portfolios but in a liquid way, so they can trade the fund deals on a daily basis.
The other theme has been the hunt for alternative forms of yield, which has become quite topical with discretionary fund management houses that we’ve been talking to. That very much drove the income-paying share class to be added in.
Is the fund meeting your expectations?
It was about £9m when it launched and now we’ve got over £50m, which is quite a key yardstick in our industry, and we’re growing it from there. We are realistic in terms of how quickly it will grow but there is lots of interest in the market. TMI is trying to build its brand and name.
What do you think engages people with your diversified multi-asset fund?
We do quite a lot of correlation analysis. Funds in that space can all look quite different. What we have found is that the simplicity of our approach has been well received in the market. Our underlying portfolio is a basket of securities. The only place where we use any type of derivatives is for currency hedging purposes. It is quite easy for people to then explain it to their clients, and very transparent in terms of portfolio contents.
Do you plan to enter any new geographical markets?
Within TMI we are looking at different offshore jurisdictions and areas where we can do business in the international markets.
There are definitely opportunities in terms of tying in with pension administrators, potentially in jurisdictions such as Malta and Gibraltar.
If we enter into a new jurisdiction, we have to go through the process of getting the funds registered. This is not high on the agenda at present but it is certainly part of our forward planning.
We are very active locally in the Isle of Man market, working with all the professional advisers and trust and corporate service providers there. We have also actively been visiting the Channel Islands in the past few years, talking to the same markets over there, trust companies in particular.
How is Thomas Miller positioning itself in terms of fees relative to its peers?
When we relaunched the funds as a Ucits, we reduced our annual management to 75 basis points, having previously taken 1%. That was with a view to making sure the total expense ratio of the whole fund was at a reasonable level. There are still quite a few funds out there that charge at least 1%. When you add in the word alternatives, it tends to go a bit higher with performance fees. We don’t have performance fees, so again, we are trying to keep it simple.
Do you have any deals in the pipeline?
We spent the last year, post the acquisition of Broadstone Wealth Management in the UK, settling that business in, meaning there are no big changes on the horizon for this year. In the past 18 months, we’ve brought in the wealth management side of the business and restructured our funds business, so really, now it’s just about going out to markets and promoting that more widely.
