Most people would be a tad jaded after a 12-hour flight from Singapore, but Jonathan Willcocks bounces into the room in a glow of yellow braces and saffron tie. “Wherever I go, the rain seems to follow me,” M&G’s global head of sales says cheerfully.
Hit by monsoon-like weather in Asia, he has returned to a predictably dreary London. Once dried off, though, he dives straight into his strategy for ensuring M&G remains around the top of the tree when it comes to its share of retail assets.
“To get noticed, you need top-decile performance. Once you have the assets, as long as you beat the index then you will do well,” he says.
At M&G – a firm that had a very different approach prior to his and others’ arrival in the early 2000s – this has not always been a fashionable view.
“The firm needed to change the way we ran money. We created a boutique franchise approach wrapped around institutional funds. Desks no longer had to follow house rules. Each delivered performance now on their own terms.”
Willcocks’ chutzpah for fund management is mirrored in his love for Arsenal FC, and for spending as much time as possible on the golf course. “I follow the Gooners very, very closely and I am a very happy supporter at the moment. We are also very lucky in this business that we can play golf around the world. I’ve played at Loch Lomond, in Dubai, Spain and South Africa, and I love it.”
While satisfied with M&G’s product suite, he is keen to add more assets to Phil Cliff’s £1.35bn M&G Dividend fund. Cliff was appointed to the fund in July, but the portfolio has consistently performed below the IMA UK Equity Income sector average. “Phil needs to build up a track record with the fund before we can take the product out with any credibility.”
Willcocks has also assured customers there will be no repeat of irregular payments from M&G’s High Yield Corporate Bond fund, which twice underpaid income last year. All clients were recompensed. “It was an accounting error on one particular fund and we are very sorry that it happened. I firmly believe that the problem has been investigated and will not happen again.”
Though there’s no doubting his passion, he was set on a very different career before his move into financial services in 1986. “I was planning to read medicine, but my father persuaded me to get out in the real world,” he says.
His first day at Hambro Bank saw large falls in the stock market. “I joined the day of the big bang in the investment management division of the bank and it struck me as a really dynamic environment to be in. It was an exciting time and there was so much going on, despite the doom and gloom around during the late 1980s.”
But it was the 2008 crash that proved era-defining for him. The crisis placed M&G in a unique position, making it the top fund house for fixed income between October 2008 and early 2012.
“We had called the banking crisis about 18 months before and had no banks exposure whatsoever within our fixed income products. People who wanted income came to us because everybody else had fallen so much during that time.”
After joining in 2002, he worked hard to modernise M&G. “The firm had spent a long time advertising with 1,000-word essays on the side of train stations aimed at the carpet slippers and pipe brigade and telling people what a bond was or what a mutual fund was,” he says.
Looking at the distribution market, he suggests the trend towards platforms arranging preferential fund deals is ”dangerous”. Asset managers are putting the quality of their products at risk by gradually dropping prices, he warns. “Once you have launched a special share class for one firm, you have to launch for another and then another.
“Before long the lower price is now your standard price and you have to launch more cut-price funds. At some point the asset management model fails, because there is a price for fund management and if you keep bringing that down you do not deliver a top product any more.”
He also believes pricing pressures will hit platforms more than asset managers.
“There is a huge variance in pricing on platforms depending on the amount of money you have got. There are price ranges from 15 or 20bps up to 50 or 60, depending on bells and whistles. This shows there is a greater range of pricing on platforms than you get from funds hosted on platform.
“Going forward, the talk about pressure on charges is more about the pressure on platforms than asset managers. I think there will come a point when that happens.”
He has ruled out the launch of an M&G platform. “We looked at it four or five years ago in great detail, and we decided that the costs involved were so great that we would struggle to justify it from a business point of view.”
As long as inflows continue, he is not concerned about where new assets come from. “Obviously there is a high chance that people will begin to look for investment services online through banks or other channels. What we need to do is make sure we are on those platforms, on those recommended lists and business-to-business propositions.
“To me it does not really matter which of those propositions comes out on top, because we are still there taking in those inflows.”
Born: Stockholm, 1967
Lives: Blackheath, London
Education: Winchester College
Career: 2005-present: managing director, global head of sales at M&G;
2001-2004: UK/Scandinavia sales director at MFS Investment Management;
1993-2001: investment sales director at Aberdeen Asset Management;
1986-1993: regional sales manager for Hambros Bank
Likes: My enchanting girlfriend, my three lovely children, cricket, Arsenal, Spanish food and wine, Nobu and the piano
Dislikes: Rugby league, buses and tubes
Book: The Prince by Niccolò Machiavelli and PG Wodehouse’s Jeeves and Wooster books
Film: The Godfather
Album: Frank Sinatra
Career ambition: To make M&G the leading retail asset manager across all international markets in which we operate
Life ambition: To always enjoy, and strive in, anything I do; to relish each success and develop from each challenge while remaining humble throughout; to motivate others to enjoy work as if it is their passion
If I wasn’t doing this I would be… a pilot/medical officer in the RAF