The story of Investec in the UK begins with Guinness Flight, which started life as the investment de...
The story of Investec in the UK begins with Guinness Flight, which started life as the investment department of the Guinness Mahon investment bank. It became a separate entity in 1990 and set up a unit trust business.
In 1997, a merger with Hambros Fund Management substantially increased assets under management and investment trust sales.
South African firm Investec Asset Management, with a total in £16bn under management, bought Guinness Flight about two years ago and it was at this point the Investec Asset Management name first appeared on the IFA radar screen.
The group recruited Jamie MacLeod from Scottish Widows. He in turn outsourced management of Investec's European portfolios to Albert Morillo, formerly at Scottish Widows and now with Black Rock.
Under the Black Rock deal, Morillo runs about £400m in assets for the group, as manager of the offshore Continental European Fund, the onshore Investec GF European Portfolio Trust and the offshore Pan-European.
Since taking over the management of the European Portfolio Trust, it has moved from a ranking of 32 out of 89 funds in the European ex-UK sector over the three years to 21 March to 23 out of 101 over one year. Over three months to 21 March, the fund has returned -5.7%, on a bid to bid basis, compared with the sector average of -9.3% and is ranked eight out of 104 funds.
The deal to outsource the management to Morillo was criticised initially as being expensive compared with running the funds in-house and that Investec was motivated by its need to have a star fund manager to create interest in the group.
McLeod said: "The first thing on the margin on our business in the Morillo deal is that there is a nŠive idea that it cannot be high margin business. Go and hire a team of nine equity specialists with a world class track record and tell me how much that costs.
"Through this deal I don't carry Black Rock's salary bill or its expenses or its research fees. What I get is a fund managed, for which I pay a small proportion of the management fees."
There are no plans for the group to outsource any further funds. Instead, Investec intends to attract names from other firms into a culture about which Mottram and Griffiths are effusive.
The pair point to a set up with small teams of managers working with a high degree of autonomy, backed up by research capabilities and third-party monitoring systems.
The aviation sector's constant evaluation of errors in order to improve safety should be applied to defined benefit (DB) schemes, as too many are repeating the same mistakes again and again, research has shown.
IA sectors – help or hindrance?
Despite multiple complaints
Annuity market worth £4bn in 2017
For ‘distress’ caused