The final details of former SG Asset Management chief executive Nicola Horlick's new multimanager co...
The final details of former SG Asset Management chief executive Nicola Horlick's new multimanager consultancy business have been announced.
As reported previously in International Investment, Horlick will be chief executive of Bramdean Asset Management and Sir Derek Higgs will be chairman. The company will focus on developing multi-manager products for private and institutional clients as well as providing a consultancy business and manager search service.
Initially, Bramdean will offer six funds within a Dublin-domiciled unit trust structure, covering asset classes including UK and global equities as well as UK gilts and international bonds. In 2005, Bramdean intends to launch an absolute return fund and a private equity fund of funds. There will also be a property fund that will be more active than traditional institutional property funds, seeking to add value through improved planning consent and also the use of leverage. All products will be Dublin domiciled to give investors access to all the major asset categories.
Both the product and consultancy business will be founded upon a multi-stage investment process focusing on manager research, monitoring and selection and portfolio construction. The multi-manager division will employ all aspects of the process while the consulting division will focus on the research and monitoring elements.
Asset allocation advice will also be provided to clients alongside portfolio construction as well as recommended scheme-specific benchmarking. The company will also offer its clients clear, consolidated fund reports.
Bramdean's screening process will focus on past performance, recent management changes, risk management and the quality of the investment team. Potential managers to be selected will be interviewed on all aspects of their investment process. For each asset class, two fund managers and four alternative managers will be selected. Horlick is to head the investment committee that will decide on managers. This team will meet on a monthly basis to make manager decisions.
Managers in the portfolio will typically be held for a three-year period. Once selected, the manager will be visited quarterly to discuss the portfolio and recent performance and the investment process will be tested to uncover any inconsistencies relative to the manager's stated investment approach.
A manager will be removed from a portfolio if there is a significant change in circumstances. For example, this could be a loss of key personnel or a destabilising change of ownership.
Fee structure will be performance based. Bramdean hopes to grow to around 40 staff members by 2007.
Horlick said: "The multi-manager structure is the ideal response to a market which is polarising into either niche or very large businesses.
"In the US, multi-manager businesses in the institutional and retail markets are an important part of the industry, running around $700bn of assets. Although there are multi-managers operating in the UK, their share of the institutional market is relatively small and we believe that there is room for a new, dynamic entrant."
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