Skandia Investment Management chief executive Jamie MacLeod can afford to be magnanimous when it comes to rival asset managers.
Since their launch, Skandia IM’s UK best ideas and global best funds have become something of an investment bandwagon, having taken a combined total of £650m since their launches.
Although MacLeod admits that this is record for the company he helped found four-and-a-half years ago, he does not believe it will be that unique. He says: “We believe 2007 will end up being one of the most buoyant years for fund management companies.”
Skandia global best ideas and UK best ideas funds have been one of the fund successes of the year so far, taking £202m since January 1, the UK best ideas £86m and the global best ideas £116m.
MacLeod claims this is a result of advisers’ trust in the Skandia brand, which he says they associate with innovation and support.
“Advisers are looking for innovative products that are backed by support and we have built ourselves a reputation for that. Before we launched best ideas, we launched the first-ever Reits fund. We have a reputation for bringing new things to the market so IFAs are watching to see what we do next.”
The support MacLeod refers to comes in the form of Skandia IM’s 21-strong research team, which spends an average 5,000 hours a year processing research. In addition, Skandia IM has an open architecture team of 10 people who work with 70 fund management groups investing in retail funds.
MacLeod says: “We don’t deal direct so we are totally dedicated to advisers. That in turn means we are completely concentrated on solutions for their businesses.”
Skandia IM manages over £5bn in manager of manager and fund of funds. In addition, MacLeod is also chief of Skandia UK’s fund management activities, which hold £37bn of assets within Royal Skandia, Skandia Ireland, Skandia Multi-Funds, Skandia Life and Selestia.
Before starting at Skandia IM, MacLeod had plenty of experience in knowing what makes advisers tick. He was managing director of Investec Asset Management’s UK and European retail operation and before that, he spent nine years with Scottish Widows, where he was head of global business and client service (Institutional Business) at Scottish Widows Investment Management.
Global best ideas, launched in June 2006, is now worth £328.m and is predicted to launch if not quite 1,000, then at least several imitations.
Its core weighting, 50 per cent, is in the UK followed by 17 per cent in the US and 14 per cent in Europe. “The decision to keep its core weighting in the UK was very much aimed at advisers,” explains MacLeod.
Four months later, the UK best ideas was launched, and as at the end of March was worth £210.9m.
The fund’s 10 managers reads like the who’s who of fund management, they include George Luckraft at Axa Framlington, Stephen Whittaker at New Star, Ashley Willing with Simon King at Gartmore and Anthony Nutt at Jupiter, and small companies expert Carl Stick at Rathbones.
“All the managers have been chosen because they are the best in their fields,” explains MacLeod.
“Despite this, each manager is monitored closely. Nothing is left to chance, he says.
Innovative the funds may be but their holdings are very much in the norm, with industrials the biggest at 30.5 per cent and financials the second biggest at 18.6 per cent.
Its biggest single equity holding is in Easyjet, with Xstrata and Vodafone Group second and third. As an inclusive fund, it keeps 14 per cent of its in Aim. The fund manager who invests the biggest share of the fund is Mark Tyndall at 15 per cent.
The UK best ideas predecessor global best ideas has a similar bank of star fund managers such as Tom Walker of Martin Currie, Crispin Odey of Odey, Angus Tulloch of First State and Nathan Gibbs of Schroders. The UK part of the fund has five managers, including Richard Plackett of Merrill Lynch and Mark Tyndall of Artemis.
It is the quality of the fund managers that leads MacLeod to justify the charges of both funds which, like other multi managers, have come under fire.
Both funds have an initial charge of 5.0 per cent and an annual management charge of 1.50 per centMacLeod says: “We are in the mid-range of fees. For example, the total expense ratio of the global best ideas was 250 basis points. I feel this is pretty much mid-range so represents good value to advisers.
“Since they have been launched, the global ideas and UK best ideas have grown by 32 and 21 per cent respectively.”
There are round 40,000 investors in both funds through 3,000 IFAs.
MacLeod does admit that, as encompassing as they are, the funds will be viewed differently by advisers.
“Multi-managers are used by adviser for different reasons and that is why we have different funds. Some will want to buy in because of the manager and others will look at asset allocation.”
For the moment. The challenge of bringing further innovation is what keeps MacLeod and his team busy although he will not be drawn on exactly what.
He says: “Multi-manager funds like ours are not about offering an investment fund, they are about offering an investment solution. As advisers become more holistic, then they will also be looking for holistic solutions, not just products or brands.
“That is why we like working with advisers, the industry is constantly challenging and rewarding.”