Threadneedle's new retail chief David Gasparro says he wants the group to establish a bigger presence in the core UK equity sector following the launch of its limited issue and Mid 250 funds.
Gasparro, who joined Threadneedle as head of retail in March, is seeking greater visibility for the group's high alpha funds, which have performed impressively since last year, but have not attracted the attention he would like.
He hopes that this will change once the funds achieve one-year track records – in May and September for the limited issue and Mid 250 respectively – but says that, as with Threadneedle's strategic bond fund, it could take longer.
“Markets will go up with some volatility and off-index funds will be very attractive. We need to really establish ourselves into the core UK market, with products such as Paul Cramp's Mid 250 fund but it could take more than a year,” he says.
Nevertheless, Gasparro, who was Schoders' head of investment products until last September, says his main challenge is to maintain Threadneedle's impressive growth.
Gross sales across the group rocketed 40 per cent last year, but Gasparro says it needs to decide who it intends to try and sell more through and why.
“I want a bit of diversification across distribution channels – not inflows through just one. We need to focus more on the UK IFA channel as business flows come through. The balance must be right between persistency, fees and inflows.”
Threadneedle is setting its sights increasingly on high-quality regional IFAs, having hit a sales ceiling with high-end distributors, many of which are already recommending as many Threadneedle funds as they are ever likely to. But despite this hunt for new business and increasing fee pressure, Gasparro says the group is keen to maintain the integrity of what he argues is a premium product.
“You won't find me rushing for sales in discounting. It is easy to do – you get into a period where performance is not so good and costs are sticky and it is easy to chase assets quickly. But you can cause immense damage – you have set a price affecting your position in the market. It is very hard to get out of. I won't let it happen.”
Gasparro, who describes his management style as “open, honest, straighttalking and, I think, fair”, is keen instead to grow the business profitably.
Although only launched in 1997, Threadneedle has £57bn under management and prides itself on its ability to adapt to market needs, not just in the UK but also in Europe, where it has a strong presence. Gasparro is responsible for Europe as well as the UK and is considering what Threadneedle's revenue stream should look like in countries such as Germany and Austria, where it has huge books of business. “There is roughly a 50/50 split between the UK and Europe in terms of sales. We need to decide the shape of the retail businesses,” he says.
Although Threadneedle is largely run independently of its owner American Express – with head of distribution David Sachon responsible for the group's relationship with its parent – Gasparro expects Amex to make its presence felt in the future.
But, with the ink barely dry on the deal, he says Threadneedle is still working out where the opportunities lie with its owner's distribution capability.
“Threadneedle is a trusted provider and we need to maintain that. We will distribute in a sensible way. Focus is a watchword. We need to focus on what assets we want to raise.”