Emerging stronger from a restructure
In late 2008, as the financial system was heading for a meltdown, a number of UK fund managers with too much debt thought corporate restructuring might drag them down indefinitely.
One of those companies was Mam Funds (Mam), then known as Midas Capital Partners, which had formed from a merger of iimia MitonOptimal and Midas over the preceding 12 months. Hbos, which merged with Lloyds TSB at the height of the crisis, had granted it a £40m loan to help fund the merger.
Together, however, Midas Capital Partners and Lloyds restructured the firm’s debt. This allowed the company to sell off peripheral businesses, focus on its Midas and Miton fund ranges and, as a result, rebrand to Mam. During this period, the firm made key hires and has now stabilised assets under management at £1.6bn.
With former Gartmore veteran Gervais Williams as its managing director, the firm has refocused on growth. Along with the other new members of the executive team, Mr Williams now has more freedom to operate, having issued £20m of shares to pay down the firm’s debts.
“[The firm] was over geared before we got involved, so we did a fundraising that took out all the debt and left the underlying business, which was profitable and cash generative. Then we began to reinvest in a more active way, in the resources we allocate to looking after clients,” Mr Williams explains.
He says that before he joined, the business was perhaps overlooked by the majority of the marketplace, but he is now focused on promoting its core specialities. Mr Williams says the firm has stepped up its client service department, so it can “start to tell a wider range of clients about the underlying strengths of the business”. However, he adds that there is still a way to go before everything is “really humming together nicely”.
“We’ve done 60-70 per cent of what we’d like to do. But new systems are bedding in and we still have to develop the systems a bit more to get the maximum efficiency out of them,” he says.
Other things on the agenda for 2012 include new funds, as well as relaunches of existing products, says Mr Williams.
“The overall trends in the marketplace are undergoing change. For the past 25 years we’ve been in a phase where the credit boom has dominated the movements in financial assets and the way that portfolios have been assembled. As we come to the end of the credit boom, and the slow growth and austerity all kick in, there are ways to manage assets that are more suited to the current environment.
“We have the opportunity to widen the range of funds and bring more teams in that follow a similar strategy to that of our recent launches – things like the Diverse Income trust and the UK Multi Cap Income fund [under the firm’s new Acuim brand], which has a target yield of 5 per cent.”