“We were wooed and bought into the idea”

But his modesty hides the fact that five short years after launching his first business venture with Guy Davies in 2000 – Attica Asset Management – it had become a significant player in the institutional multi-manager space.

Having been schooled in manager research during stints at major multi-manager houses Frank Russell (now Russell Investments), Stamford Associates and Mercer, Mr Dunne and Mr Davies saw an opportunity to launch a business which could cater for clients outside of major institutional pension schemes.

“We were very young to put it mildly,” he laughs. “I was 30 and Guy was a few years younger.

“Looking back it is quite amusing. But we were lucky in our timing, it was a fertile period for the multi-manager model and we did a ground breaking deal with Mercer, firstly to buy its research, and then to provide combined consulting and asset management. This is a model widely implemented today by the world’s largest consultants.”

Attica was, among other things, the engine behind the Mercer 360 service via its multi-manager funds and also had distribution deals through retail brands such as Abbey National and Zurich.

“You have to be lucky and we ended up in 2002/03 being involved in 70 mandate searches,” he remembers. “We were there three years by the time multi-manager became used more widely and we were established.”

In 2005, Mr Dunne attempted to diversify the business away from solely UK-based clients which had the majority of assets in UK equities at the time and turned to majority owner American Express to ask if he could acquire another company. However, Amex was in the process of separating its businesses so did not want to make an acquisition. This led Mr Dunne to sell his stake in the business, which eventually merged with Paul Kim and Richard Timberlake’s IMS business and later sold to BNP Paribas, being rebranded along the way as Fundquest MM.

Now, Mr Dunne is more than seven years down the line after he and three colleagues launched Four Capital, a boutique equity fund manager, which has the major multinational financial services firm Sanlam as a backer.

The company has three equity funds – UK, European and Global – as well as a multi-asset fund launched for former Credit Suisse and Insight Investment manager Mike Pinggera which it sells to the retail sector. The company also runs institutional money.

Mr Dunne explains his goal for Four as wanting to bring in strong fund managers and provide an environment which would allow them to work to their strengths.

“The idea was to bring together the highest possible quality investment teams, let them manage money the way they wanted to and provide an infrastructure that would let them do that,” he says.

The soft-spoken Irishman says while his co-founders Ted Williams, Tom Carroll and Chris Rodgers had to “stay out of the market” for a year after leaving their respective jobs, the groundwork was put in place for Four in 2006 and the group’s UK equity fund was launched in 2007.

Four added a European fund in 2009 for Dino Fuschillo, a former head of European equities at Societe Generale and Martin Currie, and then a global fund in 2010 for Colin McQueen, a former UBS manager who joined Four from Morgan Stanley where he was head of the value equity team. Mr Dunne explains he has known each of the managers for many years having researched them during his earlier fund manager research roles and at times being their client.

Passionate about the way the company incentivises its staff, Mr Dunne suggests he is confident about the current stability and potential future growth of the business.

“It shouldn’t matter how many teams we end up with given there is no onus on interacting with each other,” he says. “They are standalone teams and businesses. We give teams significant ownership in their specific business by giving them shares that relate to that part of the business. So they are 30 per cent owners of their own business and the company is valued every year and each share is valued as part of that – it is very entrepreneurial.” Asked about the pressure boutiques face in a world where larger amounts of fund flows are being chosen by fewer people because of the trend for advisers to outsource to multi-managers or discretionary fund managers, Mr Dunne says its relationship with Sanlam provides Four with security.

“One of the key reasons for us becoming partners with Sanlam was because we recognised in 2008 that corporate and institutional clients would be nervous about going into business with a boutique going forward, let alone big firms because of their credit risk. So we thought having an AA rated firm with a $10bn (£6bn) market cap would make most people feel comfortable.”

When Four was launched, he and his co-founders had funded the business to run for three years meaning when Sanlam approached the company with the idea of taking a stake in the business, Mr Dunne says he initially said “thanks but no thanks”.

“But over the next year Sanlam made it clear it understood how to be a shareholder in a boutique manager and demonstrated that by appointing us to run a mandate for them before a shareholder deal was agreed.

“We were wooed and bought into the idea. It has worked out tremendously well as everything they said they could do has been delivered and we delivered performance, which is effectively the only promise we can make which matters.”

The Limerick-born father-of-two’s CV might make one think that with his deep experience in fund manager research for major groups, finance had always been his calling.

He was at the time, however, actually training to be a lawyer at university in Ireland and came to London for a summer job. While in the Big Smoke he decided to eschew law court cloth for a job at an engineering company working on projects including the Docklands Light Railway.

After finding himself “earning quite a lot of money as a young person in London” a conversation with a friend in finance led him to consider taking a job at Frank Russell – which he accepted for “a lovely 80 per cent pay cut”, he exclaims.

“I figured that what I was doing working with engineering companies had a limited future and so thought I’d better invest for the longer term,” he explains. “Russell was a fantastic experience. They had 20 people when I joined but now it is one of the world’s largest multi-managers and consulting firms running $200bn.

“I worked with them in the 1990s, competed against them as a multi-manager in my previous firm (Attica) and now they are one of my largest clients – so never burn a bridge.”

Mr Dunne says maintaining relationships has been key to his career, given Attica was supported by his previous employer Mercer and managers he previously had a relationship with are ones he now works with every day.

The founding partner says in spite of his expertise in manager research he does not envisage Four having a multi-manager fund range. He says, however, these skills have helped him identify which managers to hire, enable him to challenge his own fund managers and understand how and when managers should perform.

“An asset manager with poor performance is not going to work out well,” he extols.

“There will always be short-term periods of underperformance and from my manager research days there are periods where underperformance is expected and times when it is not.

“The latter is bad but the former you can take a view about their process – the manager may be taking a big view about markets and the market has not seen it their way for the time being. I have seen that many times over the years.”

CV

2006-present

Director, Four Capital

2000/05

Co-chief executive, Attica/MM

1998-2000

Consultant, Mercer

1994/98

Research analyst, Stamford

1990/94

Various roles, lastly analyst, Frank Russell