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Liontrust targets £10bn of assets in five years

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Liontrust finalised its acquisition of emerging markets specialist Occam Asset Management last week and is focused on growing its assets to £10bn by the end of 2016.

Speaking to Money Marketing, Liontrust chief executive John Ions says the acquisition has brought assets under management for the company to nearly £1.3bn.

In August, the group announced it was buying the firm for £3.9m but a clause in the agreement allowed it to reduce the purchase price if its £124m assets fell below £97m.

Last week, Liontrust said it has reduced its payment by 30 per cent after Occam’s assets fell to £89.3m. The final price is yet to be confirmed but is expected to be around £2.7m.

Ions says Liontrust is now focusing on significantly growing its assets. He says: “I would like to see the assets in the business closer to £10bn on a five-year basis. There is capacity in the strategies we have got.

“The development of the business will be a combination of organic and acquisitive growth. Where we see teams or distribution opportunities that we think will fit in with the business plan and how we operate, we will look to acquire them.”

The Occam acquisition brings four Dublin-based funds and two Cayman Islands-domiciled hedge funds to Liontrust, which have all been rebranded.

The £62.6m Occam emerging markets opportunities fund is now called the Liontrust emerging markets absolute return fund while the £22.3m Occam Asia focus fund is now the Liontrust Asia fund.

The £6.4m Occam Asia absolute return fund has been rebranded the Liontrust Asia absolute return fund and the £12.8m Occam Europe focus fund is now the Liontrust pan-European fund. The Occam Sorbus and Occam diversity hedge funds are now called the Liontrust Sorbus and Liontrust diversity funds.

Ions says Liontrust is looking to develop the hedge fund side of the business. He says: “Now that funds with these types of long/short and hedge strategies are around 7 per cent, it is an area we need to look to expand and broaden out. If someone came along with a macro-hedge strategy, we would look at it.”

Ions says the acquisition will allow Liontrust to broaden its distribution into Europe and the US. He says: “Historically, Liontrust’s distribution is much more based on the UK marketplace. Occam’s client base is much more European, sovereign wealth clients and a little bit in the US.”

Ions says he expects the firm will launch a new product for both Occam teams, the global emerging markets and Asia teams, in the next two quarters.

He says: “In global emerging markets and Asia, shares are priced cheaply, with significant upside when sentiment improves. Clients are de-risking portfolios but there will be a time when they will want to increase their allocation to Asia and global emerging markets.

“We are in discussions with the global emerging markets team about looking at a long-only version of the absolute return product they are running at the moment.”
Ions says he is looking at how Liontrust can broaden the Asian team’s range of offerings but has not yet decided on the best route.

He says he is considering bringing a multi-asset capability to the firm. “We are still looking at multi-asset which has grown in the UK in the last five to 10 years but it is still nowhere near as big as it is in the US.”

He says multi-asset is set to become a crucial building block as it grows in use in Sipps and defined-contribution pension schemes. Ions says Liontrust will probably acquire a multi-asset team rather than build one. He says: “Multi-asset is a difficult business to grow from scratch. Growth through the intermediary market is driven through longterm performance numbers.”

He says Liontrust will not follow the current trend to launch multi-asset funds that use passives to achieve low-cost fees.

So far this year, JP Morgan, Schroders, Fidelity and HSBC have all launched low-cost, passive multi-asset funds. Ions says: “These low-cost funds use passives and we do not pay much attention to what indices are doing.”

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