Kames chief executive Martin Davis has acknowledged that the FCA's ongoing investigation into 'zombie' funds includes historical assets inherited by his firm from parent Aegon.

'When you look at some of the products that we have run for Aegon and Scottish Equitable before it, we have lots of funds in old structures, that may not really do what they said they were going to do,' Davis (pictured) said. 

'The FCA are starting to look through these over [the past] 30 years and they will include some of our funds.'

The watchdog's investigation of so-called 'zombie funds' will commence this summer, covering pensions, endowments, life insurance policies and investment bonds sold in the UK between the 1970s and 2000. The probe will extend to 30 million policies in a market worth around £150 billion. 

Aegon subsidiary Aegon Asset Management UK was rebranded as Kames Capital in September 2011 to differentiate itself from its life company parent, and before that was known as Scottish Equitable.

Davis, who joined Kames as chief executive from Cofunds nine months ago, said he was happy to lose some of the assets inherited from the firm's previous incarnations if the products are no longer suitable for their client base.

'There are areas we are in that do not match the new world, that we have had historically, and we will let these assets drift away as we rationalise our fund range. For us, it’s not all about assets under management, it’s about profitability and having the right assets,' he said.

The launch of the Aegon Retirement Choices platform (ARC) in 2011 has meant that assets coming to Aegon will not automatically transfer to Kames, but Davis said he hopes the newer propositions Kames offer will tempt advisers to stay with the company.

'We are working with Aegon UK to update our offering in the post-RDR world. We would all like these old products to be moved to the new proposition, but that is down to advisers who we hope will stay with us and move over to these products.

'We manage a lot of money for Aegon and we are working hard to update the proposition.'