‘I turned from being a poacher into being a game keeper.” Caspar Rock is describing his journey from managing money to chief investment officer at Cazenove Capital.
His background in statistics was a stable start for someone researching and managing multi manager funds. But Rock says his time as a manager has set him up well for his new role too.
Rock says: “I used to go around talking about my fund to ‘fund of funds’ people. Then I crossed the fence to the other side and actually the real experience of running direct money contributed a lot to my understanding of fund research and also helped in understanding portfolio construction, which is a skill that doesn’t necessarily come through if you go straight into multi-asset or multi-manager fund management.”
It has been a year and a half since Rock joined Schroders’ wealth management business from multi- manager Architas, which he set up in 2008.
Architas, the multi-manager firm of the Axa group, grew from £118m assets when Rock built it to £20bn when he left in 2016.
But joining an already well-established brand such as Cazenove didn’t mean less commitment than previous roles. After all, Rock was taking on a more global role, building on the the work of Richard Jeffrey, who was Cazenove’s UK chief investment officer and then stepped down to become the firm’s chief economist.
Rock says the Cazenove brand “opens doors”.
“I was very enthusiastic about what I found when I joined. Looking from the outside you can see how strong the business is; the strength of the brand is amazing. Previously, I have spent time building a new brand and it is so different coming to work for someone where there is a strong brand already there. However, you can’t simply stand still with that brand and maintain what is behind it.”
In 2013, Schroders, Europe’s biggest publicly traded money manager, bought Cazenove Capital for £424m to expand its private banking operations.
As with many other wealth management firms, Cazenove, which now manages £40bn assets, embraced the fast growing spree of multi-manager strategies which started to emerge a decade ago.
The firm now offers bespoke model portfolios for wealthy clients, a discretionary fund management service, and recently added a “low cost” model portfolio range to expand its work with IFAs.
Caspar Rock CV
2016-present: Chief investment officer, Cazenove Capital
2011-2016: Chief investment officer, Architas
2005-2008: Head of multi-manager, Axa Framlington
1995-2005: Head of European equities, Framlington
1990-1995: European equity and convertible bond fund manager, Industrial Bank of Japan
As the offering extends further, Rock is “tightening up” the investment process at the firm by introducing environmental, social and governance specialists and more talent to the six-strong fund research team.
He says: “I now want to bring the amount of active risk we take in the portfolios to the fore and try to emphasise it as part of the conversation around portfolio construction.
“We have built a certain amount of infrastructure around that to help us inform that decision-making process, which involves using more quantitative tools and applying these more consistently across the business.”
As opposed to designing funds, Rock always wanted to take after his father and pursue a career designing buildings.
“I am a frustrated architect,” says Rock. “I always wanted to do that and always appreciated beautiful buildings and great constructions and I would love at some stage to take time out and become an architect in the future.
“In my 70s I’ll be fine going happily into the Royal Institute of British Architects every day and learning to be an architect.”
For now, Rock says many businesses such as Cazenove will encounter a big challenge next year when MifidII comes into force. Despite creating greater transparency in financial services, Mifid will have the inadvertent effect of pushing the barrier higher for new entrants in the market.
Rock believes that small asset management firms, especially those that will absorb research costs under the European regulation, will struggle to remain profitable.
Over many months, Rock has been liaising with brokers to try and agree on the price Cazenove will pay for research.
He says the base level of written research has become “incredibly cheap” since the Mifid II measures have been announced. In contrast, conference calls or a simple call with analysts have become very expensive, says Rock.
“The quality of this research will be the real test after Mifid comes into force”.
Rock confidently declares he is ready for Mifid, but warns on some missing pieces.
He says: “The most important thing to understand though is the tricky bit on the regulatory divergence. Because what is mandated in certain jurisdictions is not mandated in others. And in others still, it can be clearly discouraged; for example, in Europe and the US.
“The tricky bit to cover is not fee reporting but falling portfolio values. That is an IT issue that we have had to spend a lot of money and communicate to our clients. The really important thing is to make sure advisers and clients understand it; you can’t just push a large amount of information at them.”