Heartwood Investment Management’s tie-up with Handelsbanken is already starting to bear fruit, marked by £650 million in gross inflows since the deal completed in May 2013.
This has powered assets under management past the £2 billion mark, with Heartwood’s head of investment management Noland Carter saying that the most exciting part of the deal is that it is ‘just getting going’.
In order to capitalise on opportunities to attract clients through Handelsbanken’s 178-strong branch network, Heartwood has increased the number of private client directors from 11 to 22.
Likewise, the complementary relationship between the wealth manager and its parent has been further strengthened now that Heartwood’s mass affluent investment proposition has been established. It is currently being introduced across Handelsbanken’s branches and Carter is very optimistic about the initiative.
‘What does not come through in the numbers is Handelsbanken. A year after the deal was done, we have put into place mechanisms to support their needs,’ he said.
‘It is not in the numbers yet, but we are starting to see real traction with Handelsbanken. It is another [growth] area for Heartwood.
‘There are always ways to further improve and tweak things. We have not changed our investment proposition at all but have made the delivery of it really easy and clear for the different segments that Handelsbanken’s clients could fall into.’
The reverse is also true of Heartwood clients signing up for Handelsbanken services. While this has not been actively promoted, around 15% of Heartwood’s client base has asked to establish banking relationships with Handelsbanken.
‘There are no Chinese walls between the bank and us and no financial reasons preclude us from doing business,’ Carter said.
New chief executive
In July, founder Simon Lough announced he will step down as Heartwood chief executive. He will continue working in the business and will be replaced by Tracey Davidson, a director at Heartwood who has been at Handelsbanken for 11 years.
Commenting on the development, Carter noted that because Davidson has worked for both businesses, she can act as a conduit or even the glue between them. This is particularly important, given that Heartwood acts as a stand-alone entity under the Handelsbanken umbrella.
‘It was a relatively natural time for the change to take place, one year after the transaction and with us moving quite rapidly to the next stage of growth,’ said Carter.
‘Tracey has got to know us well over the last year and was part of the due diligence team before the deal. She also knows Handelsbanken inside out.’
Carter said the majority of flows into the investment management division have come via its multi-asset fund range through intermediaries and direct clients. The fund range is underpinned by the same centralised global multi-asset investment process as segregated mandates.
‘If a client is desiring it, they can have a segregated account, but the reality is that almost all new money goes into the multi-asset funds because they are tax efficient and give clients the same outcome,’ he added.
Carter said the firm’s investment proposition for intermediaries had seen particularly strong flows, representing an area that Heartwood has invested in quite heavily in recent years, with an eight-strong team now working in this sub-division. The team has increased the number of strategic partnerships formed with adviser firms from 15 a year ago to around 25 today. It has attracted around £220 million from strategic partnerships over the last two years.
Heartwood’s charities business, headed by Guy Davies, has also got off to a flying start, Carter said. Having launched under a year ago, it has already attracted £120 million in assets. It has Heartwood’s multi-asset range at its core and the team can also run segregated accounts.
‘Handelsbanken doesn’t have targets but clients have indicated a real interest. The investment proposition on the business to business side is gaining real traction in terms of our longevity as a team and long-term track record,’ he said. ‘The net effect is we are becoming more recognised by consultancy firms, IFAs or small institutions. The numbers of beauty parades and request for proposals has more than doubled over the last six months versus the previous year.
‘I think this channel will continue to grow. The attraction of doing the deal we did with Handelsbanken is that we have a number of areas where we can progress.’
Heartwood IM in numbers:
- £2 billion under management
- £120 million in charity assets
- £650 million gross inflow since the Handelsbanken deal completed May 2013
- 25 strategic partnerships with intermediaries