With responsibility for more than £6bn across 21 products, John Ventre has quietly become one of the most influential men at Old Mutual Global Investors (OMGI) – and arguably in the multi-asset sector as a whole.
But, as the group’s head of multi-manager recounts, he had far more entrepreneurial ambitions when he pitched up at Skandia Investment Group in 2007. In fact, he had already run investment funds at a small business in the Isle of Man.
Mr Ventre admits he intended to “treat [the role] as a learning experience”, with a view to going it alone again in the future after gaining “enough skill and broader industry knowledge”.
However, after less than a year as an alternatives analyst at the group, Mr Ventre was handed his own funds: a range of six multi-asset portfolios known as Spectrum. He hasn’t looked back since.
Launched in April 2008, the range is part what Mr Ventre calls Skandia’s “revolution”, which is turning a “quiet, strategic, multi-manager business” into a fully-fledged asset manager with a far more active bias. So far, so good: as of the end of May 2014, the six funds had £2.2bn invested in them and had each gained at least 25 per cent since launch, according to FE Analytics.
“It’s been a great ride since then,” the manager says. “We proved we could do what we said we were going to do in the credit crunch. It wasn’t always pretty, but we managed to keep returns within customers’ expectations and participated well in the rebound.”
He argues that, amid all the marketing talk about how useful risk-targeted funds such as Spectrum are for advisers, the key benefits to customers are being “undersold”.
“Through many market cycles, investors tend to add risk at the wrong time and decrease risk at the wrong time,” he says. “They all wanted to buy equities in 1999 and sell in 2003.
“As a whole, more customers make those big mistakes that are destructive to their long-term wealth. We think targeting risk allows them not to fall into the destructive trap of buying high and selling low.”
After realising at the end of a law degree at Cambridge University that the legal profession was not his calling – “I think it’s fair to say I’m more analytical in my understanding; I couldn’t remember cases or anything like that” – Mr Ventre began his career in the City as a futures broker at specialist brokerage firm ADM Investor Services in 1998. In an odd twist, the firm is now based in the same building as Old Mutual and Skandia, overlooking the Thames.
“I draw a lot on the market knowledge I gained in the four or five years I spent there, trying to understand markets in close to real time, and what’s driving them,” Mr Ventre says.
“I still believe that you can pick up quite a lot of insight from live market action and how markets behave in the face of good news and bad news. When the data looks really good and markets just don’t react the way you’re expecting, that’s probably telling you something fundamental about the way the market is positioned.”
Falling commissions for sell-side brokers meant ADM had to look to other sources of revenue. This led Mr Ventre and his colleagues into securities research, and subsequently to fund management.
“We did quite well in performance terms, but it was clear we knew nothing about distribution, about how to sell our wares,” Mr Ventre says of his time there. “It was a decent living with loyal existing clients, but it wasn’t a growth business.”
On the other hand, Skandia – now part of OMGI – has set out its stall as a growing business. As Spectrum established itself as an important part of the company’s product range, so the multi-asset team Mr Ventre now leads expanded its repertoire, helped in no small part by the link to the Skandia platform.
As Investment Adviser discovered last year, the fastest growing multi-asset ranges in the past two years have come from the likes of OMGI, Standard Life Investments and Architas – all of which have a sister platform company to turbo-charge their distribution.
While the oldest of OMGI’s multi-manager products, the Best Ideas fund, still features in its line-up, the range has grown exponentially since 2008. Additional ‘unconstrained’ multi-manager funds, launched in 2009 and 2010, were combined under the Voyager brand in March 2013 and are run by Mr Ventre and colleagues François Zagamé and Anthony Gilham.
In 2012 – the same year Mr Ventre was promoted to take charge of the multi-manager team – Skandia targeted the at-retirement market with four Generation-branded funds with dual volatility and income targets. At the start of this year, OMGI added three Foundation funds consisting solely of mandates run by OMGI managers.
Including these launches, Mr Ventre is now named as a manager on 16 funds with £3.8bn under management, and another five funds are under the management of the multi-manager team. The group is also weighing up demand for additional Generation and Spectrum funds.
In addition, the head of multi-manager also helped develop, and has oversight of, the group’s new WealthSelect model portfolios, of which there are more than 40. So, how does he do it?
“Obviously, I have a big team,” Mr Ventre laughs. Three new staff joined in 2013 to develop and launch the WealthSelect models, including Stuart Clark, who is responsible for fund research and portfolio management.
“While there are some 40 or so models, it’s important to understand that the number of times you’re making a decision is much less,” Mr Ventre adds, outlining that the model portfolios are driven by a “systematic” process allowing manager selections to be implemented appropriately across multiple mandates.
In practice, this means balancing the more defensive managers within the range of managers in the WealthSelect range and emphasising them for more defensive portfolios, as well as making similar tilts towards growth-orientated or income-focused managers for other mandates. A similar approach is taken on the Spectrum funds: those taking a closer look at manager selection will see the same names in each portfolio, but with different weightings according to the risk profile.
Turning to the wider multi-manager team, Mr Ventre says his team – three-quarters of which has worked together for five years or more – has grown in quality more than quantity. While this sounds like a line from a marketing brochure, the manager’s argument is one of “shorter lines of communication”.
He explains: “It doesn’t happen very often in our industry for teams to be this stable. We’ve grown a way of working together that shortens the lines of communication, and we’re able to do things faster because we know each other’s styles and ways of doing business.
“Slower thinking is often clear thinking – we try not to make snap decisions, we believe in doing the hard yards of proper analysis, but it means we’re not wasting time debating stuff that drags us back.”
But don’t mistake “slow thinking” for a slow pace of life. Asset allocation decisions are made using futures, the manager says, and data is analysed daily in order to assess its impact on the team’s views and investments.
“It’s very easy to think of multi-manager as a sleepy wealth management business, but that’s really not the way we do it,” Mr Ventre says. “[The desk is] a lot closer to the futures floor where I started”.
