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FI&S seeks special share

With £35.2bn under management, Friends Ivory & Sime is no baby in the world of asset management. Nevertheless, with the bulk of its assets lying in the institutional arena, its retail brand is still far from being a household name.

Since its creation in 1998 – after Friends Provident acquired Ivory & Sime and merged it with its investment subsidiary FP Asset Manage-ment – FI&S has grown to become the sixth-biggest investment trust provider.

Having built a solid name in the smaller companies, venture capital and socially responsible investment sectors, it is looking to step up a gear, with the ambitious goal of increasing its market share eightfold over the next four years.

But head of retail and group marketing David Norman is adamant that FI&S is not looking to become the next Fidelity. Instead, the firm will stick to what it is good at, build on an already strong base and project to a wider audience through its new enlarged marketing team.

Norman says: “In order to beat competition from investment houses, we will focus on the specialist market and introduce innovative funds which will leverage the real skills which exist within FI&S.

“For the segments of the market where more complete, packaged solutions are req-uired, we shall introduce simpler risk-graded growth and income fund products. In short, we will ensure that our funds are designed, packaged and priced to meet the very different needs of the sales channels and their customers.”

The expansion began with FI&S&#39s acquisition of Friends Provident&#39s unit trust business in March, with the next step set to be the conversion of the Friends Provident range into an Oeic this summer. FI&S then plans to launch two additional Oeics, the first starting with the conversion of its institutional UK All-Share tracker fund into a retail sub-fund in June.

The firm will then begin on a series of launches to build up a new FI&S range of open-ended funds. Norman says FI&S is yet to confirm which funds will be launched first.

However, he says it is likely the fund manager will seek regulatory approval for several funds, launching them as and when it feels that market conditions are right.

Much of the new fund range will use Friends Ivory & Sime&#39s Responsible Engagement Overlay (Reo), which is its unique form of proactive socially responsible fund management. Instead of screening socially irresponsible com-panies from their portfolios, the fund manager attempts to change the make-up of such companies by encouraging them to adopt best practice on a range of social, environmental and ethical issues.

Having also built a strong reputation as a VCT manager, with its successful Barons-mead range, FI&S is keen to continue its focus on building its growing share of the growing VCT market. The launch of the first socially respons-ible VCT is one option which the fund manager is seriously considering.

Norman admits that winning over IFAs will be crucial in achieving FI&S&#39s goals. With the majority of its existing business coming through the IFA channel, he has learnt to realise its importance. However, FI&S will also look to use Friends Provident&#39s salesforce as another outlet for its products, with fund supermarkets and discretionary fund managers also set to be targeted.

FI&S is aware that its goals are ambitious. However, Norman remains confident that by sticking to what it knows best, the firm will achieve its targets.

He says: “The project is the single biggest strategic initiative for Friends Ivory & Sime which has yet been undertaken. We will achieve success by a continued dedication to excellence in producing investment performance, managing products which meet the needs of our investors in the various segments of the market and by aligning ourselves to deliver to our customers.”

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