For a brand that has nearly 140 years of investment heritage behind it, Fleming Family & Partners (FF&P) gives every impression of being an organisation in a hurry.
While the current iteration is little more than 10 years old – formed to help manage the $7.7 billion the family received for the sale of its historic merchant bank Robert Fleming & Company to JP Morgan in 2000 – the company has been writing cheques at a dramatic pace since 2010, as it overhauled its investment process and client-facing proposition to fuel expansion.
That investment in human capital led to it signing up Daniel Briggs (formerly of Sarasin where he was AA-rated by Citywire); buying a large stake in Asquith & Partners, the investment advisory business run by former Wealth Manager coverstar Richard Bertin; and poaching a clutch of relationship managers from blue chip rivals.
It has also tempted Ian Marsh from his previous home at Credit Suisse, where after a variety of equity sell-side and management roles in the bank over 22 years he had risen to become chief executive of its UK private banking division.
While the title on his business card is group head of asset management, the energy, zeal and determination he brings to evangelising the Fleming name must have the company's head of marketing fearing for their job security.
While a little relentlessly on-message, he certainly brings a lot of enthusiasm to the table, peppering his descriptions of the company with superlatives such as ‘fantastic’, ‘exceptional’ and ‘excellent’.
‘There is a fabulous opportunity to grow from this point,’ Marsh says. ‘There is a definite desire from the family to market the story. We have a very distinguished name, we are independent, and have an institutional-style investment proposition.
‘Trust in the big banks is at a low and that makes it a very interesting time for companies able to position themselves as trusted advisers, and which are aligned alongside their clients’ best interests. FF&P clients rank equally with the [Fleming] family and we are not burdened by the liabilities of the banking sector.’
The catalyst for the expansionary drive was the collapse of 2008 when, the ‘classic endowment style’ model that had previously shaped the company’s investment strategy broke down in the face of a global liquidity trap. Briggs – who joined as chief investment officer in 2010 – redrew the process more along the lines of modern portfolio theory, consolidating and centralising decision-making and putting a greater premium on income.
In addition to redefining investment strategy, alongside its fully bespoke fund-of-funds service the company has broken down discrete asset classes into a range of unitised portfolios, which can either be blended and risk-rated to client profile, or accessed as single-strategy mandates if internal or external clients want part rather than the whole.
‘There is a very interesting opportunity in pulling out what we do as a single asset class selection. We are not going to be advertising it on billboards but if a client comes to us and says they have £100 million in a single bank and they want to move, they can choose us for their bond or specialist asset class exposure [for example],’ says Marsh.
‘We are still sticking to our knitting and looking to choose the best asset managers but we want to be able to offer our clients our expertise on a single asset class basis and that will give us additional flexibility in what we offer,’ he adds.
In total, the company runs £3.7 billion, with £2.4 billion managed by the London office’s 16-strong investment team on behalf of 50 or so clients. It is tight-lipped about performance (in fairness, the unitised portfolios were launched too recently to have developed a meaningful track record) but is keen to promote its fee structure.
Investment services are billed at a keenly priced annual 0.65 basis points (charities receive a discount) below £10 million, tapering down to 0.15% above £150 million.
The company takes on business above £10 million, while Asquith & Partners, which largely remains operationally distinct from its parent company despite supplying financial planning to FF&P clients and sharing West End offices, operates below this level.
The joint partnership structure rather than a full integration will enable Asquith to retain its ‘independent’ label post-retail distribution review, as well as bringing in assets of approximately £150 million.
Since the deal, the company has recruited Susan Hiller, a pension expert formerly at Deloitte, and SG Hambros Private Bank’s planning and structuring expert Adrian Crowe, to bolster the team.
Born in Cheltenham, Marsh studied science at the University of Dundee and worked a short apprenticeship with British Aerospace before being offered a position as a market trader, joining the City in 1984.
After working for a number of brokerages, he joined Credit Suisse in an equity sales role in 1989, where he stayed until 2004 when the bank’s management approached him to help plan the bank’s global integration.
He says he spent a very interesting four years flying around the world looking at separate divisions and incentivising people to work together, before moving across to head the UK private bank in 2008, and joining FF&P at the beginning of 2012.
‘My job is very hands-on by design. It’s very nice to walk in every day and know what everybody does and to know everybody’s names, whether they are a client relationship manager or part of the investment team,’ he says.
In addition to Briggs and Marsh, the company bolstered the client relationship team with the hire of former Barclays bankers Scott Oliphant and David Zelouf last year, with a specific remit of growing the client base. It is currently in talks with another manager to boost its strength in direct equity.
The company is currently increasing its risk appetite for the first time in almost a year having sat out the first quarter rally, with the equity allocation rising from 40% to 50% over the last month, as Briggs says he is increasingly convinced European policymakers are getting a grip on the issues that face them.
The company has carried through some of the taste for illiquidity premiums that underpinned the endowment model, but prefers to access them via listed structures to ensure there is some degree of flexibility. Favoured picks include trusts such as aeroplane lease investor Doric Nimrod and private equity investors HarbourVest and Pantheon.
Generational changes in the Fleming family and the changing composition of the client base have both served to increase the importance of income within the funds, but Briggs has also applied some of the thematic school of investment that he specialised in at Sarasin, emphasising the shortage of income as a key driver of capital rerating as much as a source of dividends.
The house has also focused on global structural growth as a defensive hedge against fragile confidence and continued potholes on the long road toward a genuine recovery.
Alongside a sizeable allocation to gold the funds have a significant proportion of assets invested in mezzanine financing, as both a real estate proxy and to exploit bank deleveraging and has bought volatility protection while it remains cheap against the risk of a resurgence over the summer.
‘We are buying umbrellas while the sun is shining,’ as Briggs puts it.