Ex-Old Mutual bond manager Stewart Cowley has turned down running fixed income portfolios for his new business as he holds to his vow to focus on macro strategies.
Mr Cowley launched a new advisory service called Northfield Strategic Advisors last month.
The new business offers portfolio management services to “interested groups” on an advisory basis. However, the manager is being selective in his initial choices.
He said he has “already been offered portfolios on this basis, but the circumstances weren’t quite right”.
The portfolios he had been offered were small fixed income portfolios, with “little prospect of growth”, he added.
Mr Cowley repeated his assertion that he now prefers to manage macro funds rather than pure fixed income funds.
Managers of macro funds are able to take long and short positions in global equity, bond, commodity and currency markets, depending on whether they view a particular segment as undervalued or overvalued.
Mr Cowley thinks these funds are best placed for returns in the next phase of financial markets.
“I don’t see fixed income markets as return drivers. The juice is going to come from equity and commodity markets,” he said.
The former Old Mutual Global Investors manager ran the asset manager’s Strategic Bond fund between June 2009 and May 2015.
His major call of recent years was to short a variety of government bond markets following the significant yield compression seen since the financial crisis.
In addition to portfolio management, Mr Cowley’s new venture also offers independent asset allocation and investment policy advice to fund management companies, fund boards, adviser networks and other relevant parties.
Mr Cowley said: “The past 30 years have been a golden age for fund managers. But things are changing and quickly.
“The days when fund managers could earn more than their plc board members and even the chief executives look to be numbered.”
The founder of the new business said retail asset management companies could “find themselves in trouble” if “the twin forces of demographics and markets” turn against them.
Under Mr Cowley’s outsourced model, fund managers act as “external contractors or advisers” and are paid based on performance alone.
“Asset managers in that sense are converted to the owners, promoters and monitors of the product, whilst fund managers are allowed to run the products either directly or by advice on those funds,” Mr Cowley added.
His stance contradicts that taken by a number of other high-profile managers who have left larger firms to launch their own ventures based on the traditional fund management model.
