The report runs from December 31, 2003 to December 31, 2004, during which the FTSE All-share index rose by 13 per cent. Figures from the previous 12 months, when the market also rose, make for an interesting comparison. New Star topped the chart with a 500 per cent increase in funds under management from 736m to 4.4bn. This year, the firm came 34th in terms of fund growth with a 23 per cent increase from 4.4bn to 5.4bn.PMI director John Stewart says New Star was acquisitive in its early days but despite slowing growth in assets under management, it remains a force to be reckoned with. Insight went from a 0.7 per cent increase the previous year to a 60 per cent increase in funds under management between 2003/4 but Stewart says the firm’s distribution deal with Halifax is likely to be responsible. He prefers to deal with companies looking to build relation-ships with him. Stewart says: “New Star has been knocking on doors and generated a buzz in the market. We have not been using Insight as they have not come and knocked on our door. When it comes to multi-manager products, for example, we are more likely to recommend Skandia.” Equal Partners managing director Vivienne Starkey is sceptical of the “size matters” approach. She prefers to look at fund management firms on the basis of their suitability for her clients. Starkey says: “I do not see that a fund management firm attracting lots of new business makes a difference to whether they are going to be right for my clients. I will pick a provider based on the funds they offer and how they fit with my client’s attitude to risk, not on how much money they happen to be running.” Liontrust marketing director Jonathan Harbottle has seen his firm slip down the list. It has suffered from the poor performance of its first growth and large cap funds run by Jeremy Lang. In 2002/3, Liontrust increased funds under management by 159 per cent from 784m to 2bn but the following year its assets under management only rose by 8 per cent, below the rate of growth in the FTSE All-share index. Harbottle says value has done well at the expense of growth since 2000 and he is pleased to have increased funds under management at all last year with the loss of 100m from the first growth fund. However, he predicts a switch back toward a growth bias in the coming year and is allied with Starkey when it comes to ranking fund providers by the growth in their assets. Harbottle says: “These reviews are useful for the marketing directors of fund management firms to swank around the circuit. However, it is not the size of your assets but the margins you make on them that counts. Whether we take 5bn or 1bn in a year, it is the margins on assets that determine whether we are a profitable business. You can be the biggest fund manager in the world and not make any money.” Schroders had the biggest influx of money in real terms in 2003/4 with a 49 per cent rise from 13.3bn to 19.8bn under management. John Scott and Partners research and investment manager Patrick Connolly says Schroders’ success could be due to its marketing budget but he also says the firm’s clear investment strategies give it broad appeal among IFAs looking to blend risk profiles. Connolly says: “We like Schroders’ repeatable process – the UK large cap fund and mid 250 funds only invest in those stocks, so we can buy those funds and align them with others to suit our clients. Edward Bonham Carter at Jupiter will just say to a fund manager, ‘you’re good, off you go’ but we do not hold Jupiter funds for our clients because the managers will sometimes take riskier bets on that basis and we do not want any nasty surprises.” Statistics show that boutique managers Artemis had a better year in 2003/4 than the previous year, increasing funds under management by 51 per cent compared with 37 per cent the year before. Product and commun-ications director Nick Wells says he accepts that his firm is not a massive operation but it is efficient and has benefited from the kind of individual fund manager responsibility described by Connolly when referring to Jupiter. Wells says: “Our funds have grown across the board because of the relationships we have built up with advisers and the success of equity income in particular under Adrian Frost. He is investing in well-managed companies with cashflow likely to be distributed to shareholders and not all of these are big companies. Our fund managers have total respon-sibility for the investment decisions they make.” Churchill Investments head of research Warren Perry says Artemis has also benefited from continuing to promote equity investment through the bear market. Perry says: “Artemis kept on banging the drum for equities in 2002/3 when investors were not necessarily coming in and opening their chequebooks. They capitalised on their marketing momentum when equities started to recover in March 2003.” As far as IFAs are concerned, big is not always cleverest. They will choose to invest for a combination of reasons and the clarity with which a provider is able to communicate its investment strategy is as crucial as its underlying investment performance.