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Talent and time zones lure foreign firms to the UK

Talent and time zones lure foreign firms to the UK

US-based asset manager Resolute Investment Management has said the depth of investment talent, and time zones, has lured it to the UK market, as it looks to buy two UK asset managers ahead of a planned expansion of its operations.

The firm is currently in talks to buy two boutiques specialising in multi-asset investing, as its CEO Gene Needles (pictured) told Wealth Manager the best multi-asset managers can be found in the UK.

The firm already dipped into the UK asset management market by partnering with TwentyFour Asset Management. It helped the fixed income boutique launch a fund in the US.

Needles said: ‘We find the most compelling multi-asset strategies, and managers, in the UK. There’s a tonne of them – Troy, M&G, Ruffer, etc.

‘There’s a lot of investment talent in the UK, but also some of it has to do with GMT, you have access to all the major markets.

‘You can catch the end of the day in Asia, you’ve got the same time as Europe, and you can catch the start of the day in the US. You can access assets in real-time and not have to wait for markets to open.’


What about Brexit?

Needles added that Brexit has not put him off looking to launch in the UK but conceded that in discussions with asset managers in the country he has found that ‘Brexit is a concern for them’.

He said: ‘Obviously when we talk to managers in the UK, Brexit is a concern for them, but we look for investment talent wherever that resides – and that is not affected by Brexit at all – and we can find that in the UK.’

TwentyFour, which was looking to break into the US market, was one of those asset managers which ticked Needles’ boxes.

Speaking to our sister publication Citywire USA at the time of the partnership, Needles said that TwentyFour was one of the ‘one out of every 100 conversations’ with firms across the world, where Resolute had found ‘something extraordinary’, highlighting its investment expertise and ‘enduring value’.


Not the first...

So, why are UK multi-asset boutiques so attractive to foreign buyers?

If Resolute completes the potential acquisitions, it would join a growing list of foreign firms buying their way in for a UK push.

Most recently, Chinese financial services conglomerate Zhejiang Zhongnan acquired London-based Peterhouse Asset Management, and renamed the £300 million business South River Asset Management.

Zhejiang Zhongnan president Wei Wu highlighted the ‘strength’ of Peterhouse’s ‘fund management operation in London’, adding that combining it with the conglomerate’s ‘network and reputation’ in China would help deliver ‘strong growth in the future’.

While for BMO Global Asset Management’s acquisition of F&C Asset Management back in 2014, BMO co-CEO Barry McInerney backed up the point that UK firms are ideally located to deal with markets across the globe.   

He said at the time: ‘With this acquisition, BMO Global Asset Management is better able to leverage ideas cross-border and bring more comprehensive solutions to our clients.’

The rationale highlighted for the aforementioned deals also led Guernsey-based MitonOptimal to acquire boutique Coram Asset Management for its launch into the UK.

MitonOptimal managing director Scott Campbell told Wealth Manager the investment talent at Coram, led by co-founders James Sullivan and the late Martin Gray, meant the acquisition was a ‘sensible way’ to enter the UK market.

Campbell, who is based at the firm’s Cape Town office in South Africa, said: ‘There’s good multi-asset managers across the world, but certainly the UK has lots of talent in that regard, lots of depth of talent.

‘And I guess that’s partly because there’s a large investment, asset management, DFM industry in the UK. It is one of the main hubs globally for investment management.’

That is a point backed up by the numbers. According to Investment Association (IA) figures, total assets managed in the UK by IA members reached £6.9 trillion at the end of 2016.

Globally, assets under management were £60.6 trillion at the end of 2016 with the UK contributing well over 10% of the total.

Campbell also agreed that time zones make UK multi-asset managers more attractive.

He said: ‘You can still catch Asia early in the morning, Europe during the day and America opens in the afternoon. GMT helps with building global portfolios for sure.’

Another factor which can aid foreign players entering the UK market is the fertile environment towards takeovers.

One insider who has been close to several M&A deals in the industry said: ‘When a firm gets to a certain size, say around £200-300 million in AUM, people start looking at them [as takeover targets]. People say in this industry that everything’s up for sale.’

The insider added however that such an environment means foreign firms could face competition from the big boys already in the UK market, describing them as ‘hoovers’ when it comes to acquisitions. 

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