Spotlight: Wise Investment

Unusual as it is to run money from a village in the Cotswolds, Mr Yarrow has proven his bank manager wrong - accumulating £220m of assets over the past 18 years.

His business, Wise Investments, sits somewhere between a regional IFA firm and a London wealth manager. It now manages investment portfolios on behalf of 500-600 individual clients dotted around the UK, as well as four pooled funds.

The company’s development has been relatively uneventful by industry standards. This is a source of pride rather than embarrassment for the sales-shy Mr Yarrow. He stresses any growth has been based entirely on client referrals, rather than advertising or acquisition.

This focus on high quality rather than fast growth has proved its worth over the past two years in particular. Although the manager admits he underestimated the credit crunch and did not bring his clients through it "as dry shot as we would have wished", most have remained loyal. The firm’s assets under management have swelled by more than 30 per cent since the end of 2006, when the FTSE 100 was a good 12 per cent higher. Mr Yarrow did not make any redundancies during the recession.

One twist in Wise’s story came in 2004, when it merged with a Reading-based IFA-cum-investment firm called Ager Financial Services, run by David Stephenson. The FSA's so-called 'four-eye' rule requires all investment management companies to employ at least two fund managers.

For this reason, the two companies had worked together on a joint investment management venture since 1998. But the compliance costs associated with running Wise, Ager and the joint venture separately eventually became such that Mr Yarrow suggested they collapse the structure into a single entity, which took the Wise brand.

This history explains three-quarters of the fund range. Two funds of funds were launched in April 2004: TB Wise Investment, which is managed by Mr Yarrow, and TB Wise Active Growth, which is managed by Mr Stephenson. A year and a half later, Mr Yarrow launched an Income fund of funds, TB Wise Income.

The final sub-fund in Wise’s Oeic pen, Evenlode Income, has a different genesis. The only non-multi-manager fund in the range, it was launched last October by Hugh Yarrow, son of the founder.

Mr Yarrow Jnr worked at Rathbone Unit Trust Management (Rutm) for more than six years, assisting Carl Stick on the Rathbone Income fund and ultimately running his own High Income vehicle. But Rutm suffered heavy redemptions in 2008 following a period of poor performance on Rathbone Income, which held the majority of the firm's assets. Hugh Yarrow's fund was eventually merged with another and the young manager asked to leave "as a result of management realising consolidation would be necessary", Rutm chief executive Peter Pearson Lund told Investment Adviser at the time.