To say that Jeremy Nunn and Tom McGrath are excited by their new partnership at investment boutique 8AM Global is an understatement. They seem to be falling back in love with the asset management industry, which has not always been good to them.
Along with fellow 8AM Global partner Clive Moore, co-founder of investment distribution firm Idad, Nunn and McGrath are bubbling over with plans, ideas and opportunities for the firm, which rebranded from Hasley Investment Management in February.
“It has put the spring back in my step: it is like the early days at Miton or Apollo,” says McGrath, referring to the multi-manager firm he joined in 2001, which subsequently went through a turbulent period of mergers, and the company he co-founded with Steve Brann in 2008 respectively. “I thought of the name 8AM Global. It might have been Ironbridge, something strong and traditional but I thought 8AM Global sounded fresh,” he says.
McGrath says that all the clichés around the number eight were discussed, such as the stockmarket opening at 8am, the firm initially offering a range of eight funds and eight being a lucky Chinese number. “Then I went off the name a bit. I was worried I’d sound like a radio presenter, calling people and saying: this is Tom from 8AM Global,” he jokes.
McGrath concedes that 8AM Global is not well known at this early stage of its development and that the UK marketplace is very crowded and competitive. But the firm intends to hold its own among the bigger players, with former Architas manager, now Harwood Capital chief investment officer Richard Philbin, continuing to run the renamed 8AM Global Defensive, Global Cautious, Global Balanced and Global Growth funds.
“I wonder if, post-RDR, and all clients get is big manager funds from the likes of Schroder or Jupiter, that there will come a time when they think about buying them themselves and ask why they need an adviser,” says Nunn, who co-founded Hasley in 2006 with Roderick Collins and Stewart Teague. He believes advisers can justify their value by demonstrating the amount of research they do in finding funds that are a bit different. Perhaps something like McGrath’s 8AM Global Vision fund.
“That is the fund I want to run until I retire,” says McGrath. “Historically I’ve been constrained by volatility and risk parameters but this has the remit to go defensive and explore themes like the Far East, Asian consumption and demographics.”
McGrath’s financial services career has never gone in the direction of vanilla products. He started off in the investment trust team at Invesco, designing split-capital trusts. His first job with MIM Britannia, which became Invesco, was meant to be temporary just a way of funding a trip around the world. But McGrath was offered a trainee position at graduate level and took it, as it meant he did not have to get degree qualified at university. “I travelled the world nine years later, going backpacking at 29,” he says.
In 1998 McGrath became structured product development director at Close Brothers but it was not until 2001, with his move to Miton, that he started to run funds. “If you’ve ever danced around fund management roles, your dream is to run your own portfolio, particularly to have the autonomy to make decisions and not be constrained by benchmarks,” he says.
For a time Miton fulfilled McGrath’s dream, particularly with the launch of its wide-ranging Arcturus fund. But by 2008 he had left all the wrangling between Miton and Midas Capital behind to form multi-asset business Apollo. He resigned from Apollo in 2013, happy that the business was in safe hands. In hindsight, however, he wishes Apollo’s marketing efforts had been less conservative, with a bigger budget.
Back to the present, Nunn thinks 8AM Global will do well out of the pension freedoms. “My gut instinct from talking to advisers is that a lot of clients might have £50,000-£200,000 in a pension scheme. My feeling is quite a bit will come out of pensions and tax revenue will go up but people will leave a bit in the pension scheme. If it had been run as a DFM beforehand it might be too small for that afterwards but perfect for a multi-strategy fund like ours. People might have £20,000 to £85,000 or more in multi-strategy funds,” he says.
Having joined financial services in 1981 Nunn has years of experience to draw upon. He had initially followed his father into the army: “I was in the Royal Armoured Corps. I was an officer in charge of 16 solders and four tanks from the age of 19 or 20. The army was like university. It opened up doors and I got a gratuity of £3,000 at end of it, which was a lot of money in 1980,” he says.
After three years as a financial adviser at Wilsons, which did a lot of work with the army, Nunn went travelling but found it difficult to settle back in the UK upon his return. “Early 1980s England was prehistoric, life was better in Australia,” he says. Back in the UK he spent a year as a fishmonger in Newbury. “Four of us had a business, a shop plus a restaurant and I did it for a year,” he says. Then he met his future wife, Georgina, and thought life as a fishmonger, with all the early hours spent at Billingsgate market, was not conducive to life as a married man. So he moved into stockbroking in 1984 with Vivian Gray Stockbrokers, which became Gerrard Vivian Gray in 1987. Nunn moved internally through the firm until a takeover by Greig Middleton, now part of Old Mutual, meant he and his fellow directors at GVG Asset Management were eventually squeezed out.
Hasley was eventually established as a discretionary portfolio management business in the hedge fund/absolute return space. “We turned it into a fund management business by unitising our portfolios. There was no real route to market for people to get into hedge funds/absolute return funds but everyone was talking about that. We grew from nothing to around £85m to £90m but there was the crash in 2007/08 and hedge and absolute return funds did not do well, so the business suffered from that.” Then in 2012 Collins left the firm to focus on hedge funds, taking half Hasley’s funds under management with him. That paved the way for Philbin and fund manager Alistair George to come on board, eventually leading up the present rebrand as 8AM Global.
“Where I feel I am now, with the new partnership and aspirations, I feel a sense of anticipation and excitement,” says Nunn. “It will be a challenge but it is interesting and through the love of it we will make it work.”