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Categories:Investments

Ignis must get its in-house in order

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Advisers say Ignis Asset Management must focus on improving the poor performance of its in-house retail funds after it relinquished control of joint-venture boutique Argonaut Capital.

Last month, Ignis announced that European equity specialist Argonaut will become operationally independent. Ignis cut its equity stake from 50 to 40 per cent but will continue to manage Argonaut’s European distribution and marketing. Argonaut increased its stake from 50 to 60 per cent and took over UK distribution, marketing and back-office support functions.

In July 2010, Hexam Capital Partners took sole charge of its admin, distribution and operational costs and raised its 50 per cent stake to 65 per cent. Ignis retained a 35 per cent stake in the emerging market boutique.

Ignis, which has £76bn of assets under management, says it is aiming to strengthen its retail and institutional offering.

Chief executive Chris Samuel, who took control of the business in 2009, says: “Our revenue from institutional and retail clients, as a proportion of our total assets, is about 25 to 30 per cent. We have ambitious plans to expand our retail and institutional third-party offerings and we are targeting thirdparty revenues of 40 per cent in five years.”

Samuel has previously said the group will not establish any new jointventure boutiques and wants to focus on its core offering. A spokesman says it is committed to its remaining joint venture, Cartesian Capital Partners.

Ignis has seen some high-profile departures, such as sales and marketing director Jonathan Polin, who quit in June to join Ashcourt Rowan as group chief executive.

Head of discretionary sales Jon Garland left in May to follow former Ignis head of marketing Rob Page, who left in April to join Ardevora.

But Ignis has bolstered its equity team over the last year. Last October, it appointed ex-Allianz RCM chief investment officer of UK and European equities Mark Lovett as chief investment officer of equities.

In July, Ignis recruited former Insight Investment research analyst Bilal Raja as an equity analyst. It has appointed former Vestra Wealth head of investment strategy Mark Holden to manage the £112m Ignis UK focus fund and he joins the firm later this year.

Bestinvest senior adviser Adrian Lowcock says Ignis’s in-house fund range has significant performance issues. He says: “We do not rate any of the in-house funds. It was mainly the Argonaut stable that we liked. The multi-manager funds do not stand out in terms of performance, its Asian Pacific long-term track record is not great and equity income is average, so the in-house range does not stand out in a particular area. But it is good to see Ignis is trying to address its performance issues by making new hires.”

Lowcock says brand awareness is very important in the retail market.

He says: “Ignis must put what has happened in the past behind it and create momentum by getting out and talking to IFAs and addressing performance.”

Affluent Financial Planning managing director Carl Melvin says as there are so many fund managers pushing funds on a similar mandate, it is important for Ignis to market its funds so that they are on advisers’ radars. He says: “As well as trying to attend to Ignis’ performance issues, it should make it a priority to make itself known.”

Whitechurch Securities managing director Gavin Haynes says: “Ignis has pushed towards the specialist skills that the boutiques have built up, so there is not much in the in-house range that has stood out. Ignis should now focus on its core prop-osition. It should not look to launch new products.”

Hargreaves Lansdown investment manager Ben Yearsley says: “Ignis has got funds in every area of the market and it needs to be getting its managers out and building their profiles and getting them talking about the investment process”

An Ignis spokesman says: “Ignis has considerable expertise and a track record of delivering strong performance in core areas such as property, fixed income, liquidity and alternatives. Despite these areas of strength, we recognise that our equity funds have delivered mixed performance.”

He says Ignis will possibly look to expand its product range in the fixedincome area, potentially with a strategic bond fund and a credit long/short absolute return fund.

It may also look to launch an emerging market equity fund and a global equity fund with a growth strategy, which will mirror the equity funds Ignis already has in this space that have value strategies.

The spokesman says: “As we scale back the services we provide to Argonaut, including our sales and marketing functions, we will refocus these efforts towards our in-house capabilities. We will be looking to build upon the success of the Ignis corporate bond fund, Ignis absolute return government bond fund and Ignis UK property fund, which has been one of the most popular retail funds over the past year.”

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