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Premier ship

Premier started life in the late 1980s as the fund arm of an IFA business, subsequently transforming into a fully fledged asset manager running almost £2bn at its peak.

Like many boutiques, the firm has long-term staff tenure at its core, with CEO Mike O’Shea and fund of funds head David Hambidge in place right from the start.

Multi-manager remains at the heart of the group and it boasts the second-oldest presence in the UK market, first launching portfolios in 1995. Hambidge and team run the multi-asset distribution and multi-asset growth offerings, rebranding both last year to reflect a wider investment universe.

Premier listed on Aim back in 1997 but went private again 10 years later in a £50m-plus MBO to win back earlier corporate dynamism. It is now largely owned by many of the 70 staff, with private equity firm Electra also holding a 37 per cent stake.

Sales and marketing head Simon Weldon says this private status has helped the firm avoid the worst of recent market conditions and has allowed it to be acquisitive where opportunities arise.

Electra is cash-rich and sees Premier as its play in the UK asset management space, with the latter actively seeking to grow through acquisition in the short term.

Apart from multi-manager, the firm has an investment trust arm, various specialist single-manager funds and a growing private client business under Fred Fulcher.

It has grown the first two through incremental purchases in recent years, buying various closed-ended contracts from BFS for example, as well as individual funds from Solus, Aberdeen and Framlington. The firm gained CIO Paul Branigan through such a deal, acquiring Framlington’s fund of zeros along with its manager in 2006.

Key offerings on this specialist fund side include the recently launched global DSR run by Mike Jennings, one of the pioneers of thematic investing while at Sarasin. Jennings also recently took on Premier’s European growth mandate following Rupert Morrell’s exit, turning it into a large and mid-cap portfolio.

Elsewhere in the range are a pan-European property share fund run by Alex Ross, China enterprise under Fen Sung and optimum income headed by Chris Wright.

Weldon says the important element on this side is to offer something different rather than following trends. Optimum income uses derivatives heavily, for example, while the property share offering looks across the whole of Europe.

Premier’s closed-ended book is similarly niche, including renewable energy and utilities offerings.

Following the boutique handbook, managers are incentivised via a share in their fund’s annual management charge, sharing the benefits if they help to grow assets.

It sold off two more mainstream products in 2007, transferring UK opportunities and UK smaller companies to Castlefield.

Another major growth area for the business is in so-called distributor Oeics – funds run on behalf of adviser firms. Premier has taken a dual role in this growing market, running the money and providing the administration as authorised corporate director (ACD).

Weldon stresses that the two operations are separate and the firm offers a fully independent ACD service if required. Premier administers Welsh adviser firm Buckles’ Snowdonia four-fund Oeic for example, but only runs two of the vehicles itself.

It manages the income and property offerings but Sanlam runs the balanced and growth funds.

This service is designed to tap into a growing trend towards outsourcing in the adviser market, where intermediaries want to maintain client control but also offer professional money management.

Weldon notes the only issue with these is that they are run to specific risk mandates and so can meet these and yet still underperform the respective IMA balanced sector averages.

Overall, Premier now has around £200m in its multi-manager franchise and a further £300m in these distributor Oeics.

One final string to the group’s bow is structured products, although it remains a distributor of these rather than a manufacturer. The firm has always used these products in its own portfolios and will redistribute certain offerings through its IFA audience where it discerns an appetite in the marketplace.

Weldon admits the group has ebbed and flowed in this space but it is currently offering an 8 per cent annual income product in line with prevailing appetite.

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