Bryan Collings, founding member of Hexam Capital , has sold his stake in the emerging markets boutique to fund an outsourcing business that will offer back office services to small firms and individuals.
Coppin Collings Limited was funded with the £391,273 paid to Collings when he sold his partner stake in the business last year. Collings is joined in the new venture by Mohamed Abdel-Hadi, who has left his role as an investment manager at APQ Capital to come on board as a consultant.
Collings (pictured) said creating the separate business was tax efficient, and avoided the 'reputational risk' of another investment manager having to use an established investment firm such as Hexam for operational support.
He sees a gap in the market for outsourcing firms catering to small investment managers that cannot afford to run operations in-house. Coppin Collings has a capacity of £10 billion and is in talks with several individuals about using its services, although it has no clients yet.
'When we set this [Hexam] up in 2006, the due diligence was a lot less stringent. It's almost impossible to set something up now with £20 million seed capital- it's a catch 22,' Collings said. Hexam spent £3.5 million in set up costs back in 2006.
'There things are expensive and we already have the capacity. Its a hugh challenge for a fund manager and we can offer that where they would not want to necessarily engage with Hexam because of reputational risk.'
Although Collings no longer owns any part of Hexam, he still manages the £6.2 million Hexam Global Emerging Markets fund, and also a larger offshore version.
Hexam Capital was originally founded as a 50-50 joint venture between Ignis and a group of ex-Barings managers, and has had a tough time in recent years. In the year to September 2013, its profits were 1.7 million, down from 2.7 million a year earlier and all of its funds are bottom quartile on a three year basis.