View more on these topics

Playing it safe

As SG Asset Management approaches its third birthday, it is far from the speculation which surrounded the build-up to its launch.

Four years ago, founder Nicola Horlick walked out of Morgan Grenfell and set up SGAM a year later. With the launch of its first fund, the UK growth fund, media attention continued to surround the firm.

The fund&#39s aim was sim ply to beat the FTSE All Share by 2 per cent a year after char ges, which Virgin boss Rich ard Bran son did not believe was possible for an actively managed fund.

Branson laid down a £6,000 bet to SGAM that it would not achieve its aim. Horlick acc epted, offering her own challenge to Bran son that Virgin&#39s tracker fund would not achieve the same feat. The bet is over three years and the chequebooks will be coming out in March next year

Three years on, SGAM has moved from strength to str ength and is app roach ing its first major landmark of £500m in retail funds under management.

Director Mik Bates says it has been satisfying to grow a company from scratch as opposed to taking the more traditional route of acquisition.

He says: “It was nothing but shoe leather and hard work with the IFA market at first. Our main differentiating factor was that we had some very experienced fund managers from around the City. Second, unlike a number of retail firms, our funds were going to be managed with a strict benchmark.”

The firm&#39s second fund, the SocGen technology fund, was launched in May 1998 and has gone on to become the firm&#39s biggest fund. The £300m fund, which is A-rated by Stan dard & Poor&#39s, is managed by former manager of Aber deen&#39s successful tech fund Alan Torry.

With new funds arriving every few months, the next two years saw SGAM entering the European, Jap anese, UK income and global funds of funds sectors. Its latest fund, the stockmarket managed unit trust, was launched last week and is another addition to the company&#39s fund of funds range.

As a smaller company and a still relatively unknown brand, SGAM has not had the resources to launch and promote a new fund each month.

But its rec ently laun ched EuroTech Isa, which combines its existing Euro pean growth and technology funds as opposed to constructing a new fund, has initially been received with enthusiasm by the IFA market.

Bates says: “There was quite a lot of call for us to launch a EuroTech fund at the beginning of this year but we decided against it. We saw that the successful growth companies in Eur ope are the ones spending above average on technology, which are represented in our European growth fund.

“On the other side are the technology companies that are having the money inv ested in them, w
hich are covered by our technology fund. Our EuroTech Isa sees the best of both worlds.”

The company is lining up for more funds before the Isa season gets fully under way. A corporate bond fund is likely to be first, which SGAM hopes to release before the end of the year. A US retail fund is also on the cards for early next year.

By taking a safe view to investment and tightly following set benchmarks, SGAM is slowly building itself a name as a reliable investment house. Alth ough it has yet to set the investment market on fire, IFAs are keeping a close eye on the company.

Simpsons partner Andy Merricks says: “They star ted off with some promise and they have not been bad. They have not got a particularly wide range yet but they have definitely got promise.”

Recommended

BSkyB channel could aid IFAs on CPD points

BSkyB&#39s planned financial services channel could allow advisers to earn their continuing professional development p oints through TV by interactive viewing and testing.Under Financial Channel proposals, advisers may be able to earn points by automatically logging their viewing, taking part in interactive panel discussions or by using their remote controls to select multiple-choice test questions.The […]

Friends Ivory & Sime

Friends Ivory & Sime has followed up its AiM venture capital trust with the Aim VCT2 The AiM VCT 2 is aiming for long-term capital growth and will invest in around 50 companies listed on the Alternative Investment Market. These companies will be developing UK companies in the technology sector and related areas such as […]

FSA tells Widows to alter growth plan literature

The FSA has forced Scottish Widows to amend the literature provided on one of its products because of complaints that the information was misleading.The extra income and growth plan invests in a basket of 30 shares from the FTSE 100 index and promises investors a 10.25 per cent annual income plus the return of their […]

Pep restrictions to be relaxed

The Pep regulations are to be relaxed to bring them in line with Isas, as part of Gordon Brown’s ‘Helping People to Save’ initiative. The changes, which were announced in the pre-budget report, will scrap the distinctions between general and single company Peps, allowing investors to merge their Peps. Geographical restrictions will also be abolished, […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment