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Wealth Manager: establishing the roots of growth at OakTree

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by Danielle Levy on Feb 09, 2012 at 00:01

Setting up a wealth management business in the midst of the 2008 credit crisis could be considered bordering on reckless. However, OakTree Wealth Management founders Ian Brady and Jeremy Arthur say it has proved a risk worth taking.

‘[OakTree] was entirely the brainchild of Jeremy,’ says Brady, OakTree’s chief investment officer. ‘He had been a director at Towry and was in business development at Anderson Charnley.

‘He also lives in Henley and had used the Invesco Perpetual fund of funds that I used to run, and our wives were on the board of governors at our children’s school. Jeremy had been on at me for a couple of years, saying “the industry is changing and there are very few companies that can marry all-of-life holistic planning with an institutional fund management capability”.

‘Eventually the time was right and we thought we could bolster the fund management capability by having some external consultants who had vast experience that could help. We were setting up in the throes of Bear Stearns, Madoff and Lehmans, so we had to have some firm foundations.’

The consultants came in the form of Ian Cooke, head of North American equities at Kames Capital, and Steve Renton, formerly of Morgan Stanley, who both continue to sit on OakTree’s investment committee. Renton is keen to explain why 2008 could be seen as a good time to set up shop.

‘I thought it was an interesting time to start. People were saying, “You are starting a fund management business in 2008 when the world is ending”. I think it was a good time because a lot of people had seen assets evaporate that hadn’t been managed properly. There was potential to do something different,’ he says.

Brady adds that fully funding the business for three years gave the company and potential staff the stability they were looking for.

‘We think this was the best thing we did, prefunding the business. We were fortunate that we were in a position to do so. It allowed us to bring on more clients quickly and attract some high quality staff.’

Three years on, the Henley-based operation has attracted £52 million in assets, and 77% of revenue, which last year was around £550,000, is recurring. While the firm has a £250,000 minimum asset level for potential clients, the average size of a client portfolio is nearer to £650,000 and it has stayed true to its mission to provide a fully integrated offering to clients.

‘Our view is you cannot do portfolio management out of context,’ says Arthur, who is responsible for the firm’s financial planning operation. Having a comprehensive understanding of the client is central to OakTree’s approach.

‘When we get a prospective client we really talk to them about their long-term aspirations and intergenerational issues. It is what we have done historically and we do that to really build a clear picture of the individual.

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