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Team tactics

Martin Currie is another boutique with a century-plus legacy, although its greatest strides in the retail market have come in the last four years.

Founded in 1881, the Edinburgh firm has maintained its much-prized independence and employees currently hold 75 per cent of shares.

Ownership is spread across all staff rather than just those at the senior end, with a 5 per cent cap on any one individual.

This structure has instilled a culture of long-term loyalty and low staff turnover, with, for example, CIO James Fairweather residing at the firm for a quarter century.

The firm has a long established reputation in the institutional market and managing director Andy Sowerby joined from Investec four years ago to push a strong set of funds in the retail sector.

Key figures on the management side are Willie Watt as CEO and Fairweather, both integral in paring the business down to active equity management.

The group previously had bond, private equity and private client arms and all were sold off to focus on its original core strength.

Martin Currie only runs equities and has a range of 11 Oeics and nine Sicavs spread across all the main sectors. It has invested heavily in the fund management operation, increasing the investment team from 26 to 46 in the last few years.

As part of this, the group has developed a big in-house research unit, with several career analysts covering global sectors in the team of 14.

On the distribution sales side, Alan Burnett joined shortly after Sowerby as head of UK intermediary sales and a team of three has expanded to nine.

Looking across the range, the most popular products include the Japanese and Asian funds and Tom Walker’s US portfolios.

Twenty-year Japanese veteran Michael Thomas retired 18 months ago and the group strengthened its team to six to cope with the loss.

Sowerby notes that many competitors have pulled out of this area as they are unwilling to commit the resources necessary to outperform.

Elsewhere, Asian manager Jason McCay and Walker are more of Martin Currie’s decade-plus club. In American equities, the latter offers core and focused products and features on several adviser buy lists.

More recent additions to the range include a global alpha fund run by Fairweather, just coming up to its three-year retail track record but based on a long established institutional offering. Earlier this month, the group also launched an onshore global energy portfolio run by its resources desk, which took over £30m in its first week.

They also manage a top-performing offshore global resources fund and several clients asked if the firm could offer an energy carve-out from that.

As for the competitive UK and European equity sector, Sowerby says the group set out to focus on the areas where it can offer genuinely market-leading propositions.

Overall, the firm also feels that many portfolios are too skewed towards UK equities and expected this area to suffer outflows based on a core – and proved right – case for weakening sterling.

On the European side, Dino Fuschillo left last year and replacement Stewart Higgins is building a track record.

As for the UK, Martin Currie has a high-yielding fund run by Scott McKenzie, which has suffered alongside similar peers in tough markets.

Jeff Saunders also runs a UK growth mandate, which is popular with multi-managers as part of a blended approach but not pushed aggressively to retail investors.

Many competitors have struggled in tough markets but the group improved its profitability from 2007 to 2008. Martin Currie was ninth- best in terms of net retail sales last year despite the fact that it is a pure equity house and bonds gradually came to dominate overall business.

Sowerby also highlights limited debt and the fact that the shareholders are also the wage-earners, with this dual focus making for a more flexible business.

All this has allowed the firm to take a longer-term view. It is currently hiring when most rivals are trimming back staff and launching products when the trend is for consolidation.

Sowerby says: “During the crisis, we have focused on protecting the proposition to clients. Our view is that Martin Currie’s strengths as a business can really come to the fore in periods of market dislocation.”

With 260 staff, the firm currently runs £10bn in total and £1.2bn in the Oeic range, although both figures have been hit by recent market weakness.

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