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Expert blend

Marlborough Fund Managers has transcended its earliest admin roots to become one of the best-known boutiques in the market, offering several popular funds. Along the way, the group has built itself up by incorporating various external portfolios into its own range, often establishing the third-party admin relationship first.

The Bolton-based firm was launched in 1987 and founder Geoff Hitchin still runs the debut global bond portfolio 22 years later.

He was a tax partner at Ernst & Whinney and set up Marlborough and the bond fund to provide efficient savings vehicles for his clients.

In the early years, the group used its resources to provide admin for various smaller firms, with Blackpool stock-broker Hargreave Hale a key early client.

At outset, manager Giles Hargreave’s small-cap offerings were only available to the stockbroker’s clients but the funds came under the Marlborough brand earlier this decade and were opened up to the wider investment community.

Meanwhile, the group linked up with a Derby IFA practice wanting to leave behind advice and start a unit trust business.

This firm reversed into Marlborough in the late 1990s and became the Investment Management arm, bringing across £100m in three funds of funds. This team is led by MFM deputy chairman Nick Cooling, with support from Gurgit Soggi and Rajesh Manon.

As the firm has grown, it has gradually built up its sales team under Keith Ounsworth, which now covers most of the country, and added several more funds along the way.

On the fixed-income side, Hitchin still heads his global bond portfolio as well as a bond income vehicle launched in 1998. The group also outsources a high-yield mandate to Paul Reed at Aberdeen.

This blending of in-house and external expertise is also evident across the equity range with the UK funds, including three funds run by the Hargreave Hale team. These include one of the few genuine micro-cap vehicles available in the UK retail market, the small- cap focused special situations and UK leading companies, which invests across the cap spectrum.

All these boast impressive track records, with the two small-cap vehicles both top-decile over three years to the start of July and UK leading companies 38th out of 275 UK all companies competitors.

Marlborough was also able to recruit the well-respected Greg Bennett from Neptune in 2006 and he heads the UK large-cap growth and UK equity income portfolios.

Bennett’s funds are also among the group’s top performers, with UK large cap top-quartile in the UK all companies peer group over three years and UK equity income now ninth out of 69 in its sector.

Elsewhere, the Far East growth offering is run by Singapore firm ARN Investment Partners while Bob Brown manages the Quantock UK growth and ethical funds from his RC Brown office in Bristol.

RC Brown IM has managed the Joseph Rowntree Charitable Trust since 2003 and Marlborough’s ethical offering uses similar criteria, including lighter-green engagement policies.

The Quantock portfolio was the subject of a tug of war in 2005, with Marlborough taking legal ownership from Matrix after building up a stake via its own funds of funds. Among the latest additions to the range are various funds of ETFs, including a popular vehicle investing across commodities.

Once again, Marlborough initially provided third-party admin and ACD functions for the Coventry-based manager iFunds before moving the vehicles into its own range last year.

Looking forward, the group is also developing on offshore product suite, buying a controlling stake in the Guernsey-based Apollo Investment Management this year. This business will likely be rebranded Marlborough International. On the offshore side, the firm will launch various feeder portfolios for its onshore range and is also likely to convert the Apollo California fund into a wider US offering and potentially migrate it onshore.

According to Ounsworth, there are also longer-term plans to add European and Japanese funds but there is no hurry to boost the proposition.

Across the whole firm, assets under management are slightly over £1bn, with around £805m across the unit trusts and the remainder in the MIM multi-manager business. Fitting the usual boutique template, Marlborough is 100 per cent owned by the directors.


Neutral grounds

Last month, we released the initial findings of our third GB Investor Report based on an online survey of over 4,000 retail investors. This shows that, in May 2009, the IMA Investor Confidence index turned slightly positive, with the index indicating that investors on the whole are still neutral about putting money into new investments or increasing existing investments.

Crash caller

In 1997, Fred Harrison wrote to the Government and warned that it had 10 years to try to stop an impending global depression.


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