Rowan Dartington has sought to allay concerns over how advisers will react to its acquisition by St James’s Place (SJP), saying it enjoyed its best ever month of business in October.
Graham Coxell, executive chairman of the discretionary fund manager (DFM), said the firm’s net inflows for October reached a record level, though he declined to disclose exact figures.
In July SJP acquired the business for a figure that could rise to £34m, saying it had been “looking at providing a DFM service for some time”.
It added that Rowan Dartington would provide “an excellent platform from which to build this additional service for our clients”, but the deal raised concerns among some industry figures over the DFM’s ability to remain independent while being owned by a restricted advisory firm.
Mr Coxell, however, said initial concern from some clients had been assuaged by reassurances that Rowan Dartington’s business model would not change.
“October was our best month for net new business. We have continued to work closely with advisers [following the announcement of the deal]. It was our best ever single month.”
The executive chairman, who joined Rowan Dartington in 2011, said the firm’s senior management would remain in place once the deal, which is still awaiting regulatory approval, goes through.
He backed a vertically integrated strategy as the “right choice” for investment firms. But with SJP already offering a range of in-house funds to clients via mandates agreed with external fund managers, Mr Coxell suggested the FTSE 100-listed firm would be unlikely to acquire an asset manager in order to further this strategy.
“You have to be careful about boiling the ocean,” added Mr Coxell. “They have produced record figures, are increasing headcount, dealing with pension freedoms, have just purchased us and expanding into Asia. It is now about delivering on promises. It’s this focus I admire about SJP.”
Mr Coxell has already insisted that Rowan Dartington will remain a whole-of-market discretionary firm. Any change to this status would inhibit SJP’s growth ambitions, he said.
Full details of the way SJP will interact with the discretionary manager will not be made public until the acquisition completes, but Mr Coxell said he does expect Rowan Dartington will be able to place further pressure on fund management fees as a result of its larger parent – even though it will remain an independent subsidiary.
“It will allow us to make a little extra return for the client. An extra two or five basis points all add up,” he said.
Rowan Dartington has continued its regional expansion plans following the deal, opening an office in Birmingham last month. Mr Coxell said the rationale for the office had been “further strengthened” by the proposed acquisition, given SJP’s considerable national footprint.
