IFAs believe the merger between F&C and Isis is a good move for both companies, offering them a strong strategic fit which should allow them to integrate complementary product ranges seamlessly.
Isis has 33 open-ended funds aimed at retail investors, including its higher income and with-prospects Oeics, while F&C has only three funds, with the bulk of its range targeted at the institutional market.
F&C, unlike Isis, has an extensive strong range of investment trusts, including one of the market's biggest, the £2bn Foreign & Colonial trust.
IFAs say this should mean very little rationalisation, with both groups able to concentrate on their strengths, particularly as there will be no change to their investment processes. Bestinvest fund analyst Stephen Marriott says: “Isis will take control of retail money and has managed to grab a strong deal. It makes sense for both companies. It is a merger of equals and helps both to achieve their targets.”
Chelsea Financial Services agrees but, along with other IFAs, expresses surprise that the Isis brand, which has been so heavily promoted as the firm tried to break into the IFA and consumer markets – is set to be supplanted by the F&C brand.
Some IFAs also wonder if there could be internal ructions as the groups, which are very different in background and outlook, begin to work together.
Chartwell Investment Management director Sue Whitbread says: “There is a question mark over the cultural fit as trying to combine the young aggressive Isis with the traditional conservative F&C could cause some internal problems but clients with funds with either group should not be worried.”
Foreign & Colonial Investment Trust launches the world's first pooled investment vehicle 1953
Foreign & Colonial Investment Trust separates its fund management operation, creating F&C Management 1978
Enters the UK pension fund market
Establishes partnership with HypoBank
F&C buys Electricity Supply Pension Fund
Eureko buys German firm HypoBank's 90 per cent stake in F&C.
Eureko acquires 100 per cent of the group before combining its asset management activities with F&C's under F&C brand 2003
F&C closes its IFA salesforce
F&C and parent Eureko announce flotation plans. The merger with Isis achieves F&C's goal as Isis is a listed company