The last few years have been turbulent to say the least, not just for economies and stock markets, but for many asset management firms that have been forced to restructure and consolidate their businesses.
For Ignis Asset Management, the period has been one of major transformation, as those at the helm sought to turn around performance in lagging areas, while creating foundations on which new parts of the business can be built in the years ahead.
Chris Samuel, who took charge as chief executive officer in 2009, says he has a clear vision of the firm’s direction, which he believes will come to fruition between now and 2015.
His first move was to establish the firm in its current guise, by which Axial Investment Management merged with Ignis to form Ignis Asset Management, in 2009. In that year, Ignis also created a new sales team to boost its European distribution capabilities, a region that is a focal point for Ignis’s expansion plans.
‘We have worked to transform into a leading asset manager,’ said Samuel. ‘Not necessarily the biggest or most profitable, or best performing, but one where customers want their money managed by us and shareholders see us as a valuable asset, while the industry respects us for what we do.’
The transformation process has been multi-faceted, and included the institutionalisation of the firm’s wholesale business to complement its life company roots. The process has involved key hires, rebranding, the ending of joint ventures and the launch of core products, to name but a few developments.
End to joint ventures
Of ending the joint ventures that were initiated and fostered by previous chief executive Jonathan Polin, Samuel said: ‘It enables us to now invest in core Ignis, to build our investment capabilities and ensure we have a well-controlled, efficient operating platform.
‘We wanted to do what was right for the various stakeholders,’ he added. ‘It was in the customers’ best interests for them [the joint ventures] to have more resources under their own control.’ The last of these, Cartesian, became independent at the end of last year.
The move allows Ignis to focus on its core investment performance, which had been weak in some departments – namely equities. Samuel said the reorganisation of the business, along with strengthening investment capabilities, which started in 2010 and investing in growth with the bolstering of the firm’s distribution teams, has helped drive business performance.
‘Asset managers can wrestle over whether they’re an investment-led or distribution-led business. But be clear: we want to be investment-led. So we have organised the business to reflect that.’
However, he says investment performance ‘is not a short-term game; you don’t completely transform in three years. Change will take more like five to 10 years’.
Performance has improved, with 74% of total assets outperforming over the year to the end of November and in the firm’s last results, it announced it had seen £927 million of net inflows over the six months to the end of June, boosting profitability.
But Samuel concedes there is further work to do, citing UK and regional equities as areas where they have made key changes and hires, to create an estimated turnaround in one to two years’ time. In terms of areas of strength, he points to the performance of its fixed income, real estate, alternatives, and absolute return products.
He is also excited by the firm’s new liability driven investment (LDI) arm, derived from its heritage in having life company clients.
‘Evidently it’s in our blood to manage against liabilities. We have huge skills in the LDI space; we believe we do it slightly differently. We use a forward rates process; we have one big client for whom we do that, and there’s strong interest from a number of other institutional consultants.’
In order to enhance focus on the core business, Ignis outsourced its back office operations to HSBC in 2011.
Aligning the firm’s management of life company assets with third party assets has also been a move Samuel was keen to pursue.
‘When I joined it was evident that we needed to manage our life company assets as we would any other third party, to create a standard provision of services to customers,’ he said.
‘Today, our life company clients pay fees driven by market forces and have consolidated their various mandates into manageable pooled vehicles. Our service to them effectively mirrors the relationships we have with third party clients.’
Investment in key people has been a major drive. At the beginning of 2010, Ignis brought on board Chris Fellingham as chief investment officer (CIO).
Samuel said: ‘We also created CIOs for each business unit. In 2010 Gary Hutchinson was appointed CIO of real estate, Mark Lovett CIO of equities and Michael Timmerman was appointed head of Ignis Advisors, the multi-manager business.
‘Underneath these hires, we have invested as we’ve seen fit to boost the teams. We have strengthened investment and are now investing in growth.
‘We have also expanded our distribution building international and institutional teams alongside our UK wholesale business. We have also bolstered our product development team, hiring Jeremy Soutter and Robert Corbally from Aviva to develop and rationalise our fund range,’ he added.
‘We have a lot of funds, in many different jurisdictions and we want to ensure we have the most appropriate structure and products for each of the channels in which we operate.’