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Wealth Manager Profile: Jonathan Blain

by James Phillipps on Apr 27, 2009 at 00:01

Wealth Manager Profile: Jonathan Blain

It may not have been quite an Annie Get Your Gun moment, but after spending several years as an investment consultant, IPS Capital’s Jonathan Blain believed he was much more in tune with the needs of high net worth clients than the managers he was selecting.

At the height of the bear market in 2002, he decided to act on his instincts and made the switch to offering a discretionary asset management service.

He says: ‘When the business was an investment consultancy, we carried out manager selection and due diligence for clients. At the end of the 1990s, the brief was typically to outperform the FTSE All-Share by 2% a year. But we felt that a better approach was needed.

‘We recognised that with most trust funds, especially where the wealth had been around a long time, the number one priority was capital preservation, and then returns above the risk-free rate. We took this mantra from the hedge funds and were early adopters of this mentality.’

Blain, who is both chief executive and joint chief investment officer, says that back then, private client portfolios typically comprised the traditional mix of equities, bonds and cash, but he was adamant that IPS would take a much broader approach to investing and make use of a much wider range of assets, including hedge funds and commodities.

After running a ghost portfolio for 12 months, the firm went live with its first few clients on 1 January 2003 – ‘friendly ones’ it had known for some time. It opted for
a clean charging structure of 1% a year, although with commission rebates this averages 0.8%.

‘The first couple of years were a major struggle,’ Blain admits. ‘When you turn up for a pitch and you say you only have £20 million under management, people will tell you to come back when you have £100 million.

‘We now have £250 million under management and are looking to raise our profile, which we feel is appropriate for the next stage of our development.’

As part of this development, last year the firm rebranded into IPS Capital from IPS Consulting – a legacy of its past guise – and the business was restructured into a limited liability partnership.

At the same time, Blain has grown the team from five to 15, including hiring in a joint chief investment officer, who has already started with the business on a part-time basis and will formally join full time in July.

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