InvestmentsApr 7 2015

‘When a decision is made, we know who’s accountable’

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Whether at Invesco Perpetual, Hermes Fund Managers or Rathbone Unit Trust Management, where he is chief executive, he notes “it’s something I really enjoy”.

It may be difficult to imagine that any of those companies were once considered small, but Mr Webb joined them when they were much more under the radar than they are today.

He remembers starting at Invesco in 1998 as managing director of its retail business when it had £1.2bn under management. It’s hardly small fry, but Mr Webb explains that at the time it was “a small business within quite a large firm”.

“We grew that in the following three years to around £8bn,” he says. “At which point Perpetual came up for sale. We bought Perpetual and the retail business became Invesco Perpetual. I was chief executive of that business until 2004.

“When I left in 2004 we [had] about £21bn and were certainly the fastest selling unit trust business in the UK. I can remember when I first stood up and said, ‘our aim is to overtake Fidelity’, we looked like we were mad, but we were very successful.”

Following his departure in 2004 Mr Webb took a break from his career to go travelling and on his return realised he had little experience on the institutional side.

“So I joined Hermes and spent a very happy time there reorganising its business, making it more commercial and building a sequence of multi-asset boutiques, including purchasing a number of companies.”

But after a few years he decided the job was “a little bit too institutional for me” and what he really wanted was an opportunity to take a small business and “bring momentum back”. That came in the form of Rathbones, which he joined in February 2010.

He refers to Rathbones as a “business that had lost momentum” in the wake of the financial crisis. Assets under management had peaked at roughly £2.2bn in May 2007 but had declined to £750m by the time Mr Webb joined.

“We have been working since then to regain the profile and keep the business stable,” he adds. “I am very fortunate that I have a number of senior fund managers who have been here in excess of 10 years – they are highly talented. We have been adding resources to support them as the business has been growing again. We have also rebuilt the sales and distribution part of the business because that had been knocked sideways when I arrived.”

He goes on: “It was really about creating confidence in the business, making sure that we retained our talent, added to it, realigned our remuneration to the success of our clients and making sure we all had a share in that success.”

When Mr Webb talks about the company, the word “collegiate” keeps cropping up. He is clear about the type of culture he set out to create: “We don’t stand on ceremony, but there is obviously clear accountability throughout the organisation. That’s the way I like it, so we treat each other with respect but don’t wield authority all over the place. It’s just when a decision needs to be made, we know who’s accountable for doing it.”

Mr Webb’s strategy was to establish Rathbone Unit Trust Management as a specialist investment group, rather than try to be “all things to all men”.

“It’s quite rare to have an asset management business as part of a wealth management business,” he concedes, “but that fit in today’s environment is better than probably another kind of ownership because we’re able to be relevant for clients who have £1,000 up to £100m plus [to invest].”

As part of this culture of retaining and nurturing existing “talent” at the company, Mr Webb insists fund managers be allowed to run money their own way.

“We don’t have a house style, but each investment manager has to be able to articulate what their investment philosophy and process are and we check it every six months,” he says. “That creates accountability in the minds of the fund managers but gives them the flexibility to run money in the way they think is correct.”

It is clearly not the only investment house to breed this type of culture among its managers, but Mr Webb’s entrepreneurial leanings are evident in allowing individual thinking to take precedence at Rathbones.

Perhaps it is, in his own words, his rather “curious route” into the industry that meant he has avoided instilling a corporate mindset. He may have studied law at university, but Mr Webb’s first job on graduation was as a stand-up comedian – an expression of his desire to act for a living. He performed at the Edinburgh Festival Fringe twice and toured pubs and clubs, until eventually his bank caught up with him and insisted he “ought to get a proper job”, he laughs.

Mr Webb, whose father was in financial services, swapped his acting ambitions for a job in the investment management division of a bank. He still harbours desires to act, though.

“You have to realise you might want something, but unless you are genuinely talented at it you are never going to make it,” he admits. “Do I regret it? No, I don’t regret anything I’ve done in life. And I’m still learning every day. It is really important that you never think you know what’s coming up next. You’ve always got to have your ear to the ground, talking to people, gaining opinions.

“It’s the same in investment management as well. You have to learn from your mistakes – it makes you a better manager.”

Harking back to his days at Invesco Perpetual and the changes that business underwent, Mr Webb believes it built an “exceptional business”.

He remarks: “I was only a tiny cog in that wheel, but it was great to be part of that success. What I and the teams I’ve worked with have always been pretty good at is trying to unpick what today’s environment looks like and how it might change in the next five to 10 years.

“It is increasingly difficult to do so because change is being driven by the regulator as opposed to the customer.”

As for what the future holds for Rathbones, Mr Webb has a clear vision: “I’d like to see Rathbones become recognised as a force in wealth management and as one of the best specialist management houses from a unit trust perspective that is really respected by the industry.

“We are already well respected but, for instance, [within] the financial adviser community, our discretionary fund management side is not as well known as perhaps it should be. I’d love to make sure that changes.”

On the unit trust side, which has grown to £2.5bn, Mr Webb predicts he can grow this beyond £5bn, saying: “There is a lot more to go for as far as Rathbones is concerned: a continuation of a relatively narrow direct range where we do what we do really well and get well known for it, and a multi-asset range that, together with our commercial proposition, becomes a real driving force among financial advisers looking to outsource their investments.”

CV

Mike Webb

2013-present

Member, Rathbone group executive committee

2010-present

Chief executive, Rathbone Unit Trust Management; board director, Rathbone Unit Trust Management

2006-2009

Executive director and head of business development, Hermes Fund Managers

1998-2004

Deputy chief executive, then chief executive, Invesco Perpetual

1996-1998

Managing director, retail division, GT Global Asset Management

1991-1996

Sales and marketing director, Prolific Financial Management

1986-1991

Investment management marketing, Hambros Bank