Friends Life may turn to equity outsourcing

Friends Life Investments is considering outsourcing its equity mandate and is in talks with Jupiter Asset Management on running Japanese equities, Money Marketing understands.

In November, Friends Life announced its intention to launch an asset management business in the second half of this year. The firm said it will initially focus on fixed income but will consider other asset classes in due course.

It is understood that Jupiter is in discussions with Friends Life Investments about running Japanese equities for the firm.

Jupiter has one specific Japan offering, the £468m Jupiter Japan income fund, run by Far Eastern equities joint head Simon Somerville.

The Far Eastern equities team is made up of four people, including Somerville and joint head Philip Ehrmann.

Friends Life Investments has already recruited the fixed-income team from LV= Asset Management to run its fixed-income proposition.

The team, which consists of former LV= head of fixed interest Michael Wright and former principal fund managers John Hampton, Purna Bhudia and Nigel Bradshaw, joined in January. Wright has joined as head of fixed income and Hampton, Bhudia and Bradshaw have joined as fund managers.

Friends Life Investment chief investment officer Mark Versey says: “A decision on whether to expand the remit of Friends Life Investments into equities has not yet been taken. Regarding specific mandates and managers, it is normal practice for us to be in discussions with managers regarding a variety of ideas.”

Jupiter declined to comment on the isue.

Highclere financial services partner Alan Lakey says: “It is quite expensive to outsource fund management but the outperformance gained from this outweighs the expense even with only an extra 0.5 per cent a year of greater performance.”