Harwood acquires DFM to bolster MM offering

The move, for an undisclosed sum, will see greater depth of resources added to Harwood’s multi-manager business, according to Alan Durrant, chief executive of Harwood, and help boost its services to advisers.

Mr Durrant said that the Kent-based wealth manager, which has worked with financial advisers since 2001, will continue to build on the local support it has in the financial adviser community.

Wellian’s multi-asset portfolios have delivered strong returns for clients and has assets under management of £185m.

Mr Durrant is set to become chief executive of the new set-up, and Richard Philbin will be chief investment officer, working alongside Wellian investment director Chris Mayo. Mr Durrant said: “Wellian is an excellent fit for our business bringing discretionary portfolios managed on a wide range of the platforms supported by advisers.”

Eric Clapton, Wellian’s managing director, said: “The growing number of IFAs introducing their clients to Wellian will undoubtedly see this as adding to the strength in depth for the business.”

This sort of acquisition activity will become more frequent across the industry in coming years, Meera Hearnden, senior investment manager at Bristol-based Parmenion Investment Management, said.

She added: “Not only will this acquisition bolster its fund offering, it should also enhance the research capabilities as well as hopefully bring about cost savings.

“It makes sense for smaller firms to collaborate for these reasons, particularly in such a competitive market, and I would expect more of these types of deals taking place in due course.”

Wellian’s discretionary portfolios are managed on a range of platforms supported by advisers. The nine risk-rated model portfolios are: Conservative, Income, Balanced, Growth, High Income, Conservative Passive, Income Passive, Balanced Passive and Growth Passive.

Wellian’s Income model portfolio has returned a good 35.26 per cent in the past three years, according to its latest factsheet, outperforming both its benchmark ARC Sterling Balanced PCI and the Investment Association’s Mixed Investment 20-60 per cent share sector.

The objective of the portfolio is to provide both long-term capital growth and an income of at least the FTSE All Share Index by investing across global markets and a range of asset classes.

Equities are the fund’s highest conviction, with a 55.7 per cent exposure, made up of 37.7 per cent UK and 18 per cent international.

The remainder of its asset allocation is spread across fixed interest, at 27.5 per cent; alternatives at 8.4 per cent; property, at 6 per cent, and cash, at 2.4 per cent.

The portfolio’s top holdings are the £1.1bn Rathbone Income Fund, at 6.3 per cent; £7.2bn Artemis Income, at 5.8 per cent, and the £1.6bn Fidelity Strategic Bond, at 5.4 per cent.

Wellian’s Growth portfolio has returned an excellent 38.29 per cent in the past three years, according to its factsheet, and also outperformed the same benchmark and also the IA Flexible Investment share sector.

The equity-centric portfolio has 25 holdings and offers a higher level of risk with an 89.7 per cent exposure spread evenly across the UK and globally.

The remaining 10.3 per cent of the asset allocation is spread across alternatives, fixed interest, commodities and cash.

The portfolio’s top holdings are the £2.1bn Old Mutual UK Alpha, at 7.4 per cent; the £4.6bn AXA Framington UK Select Opportunities, at 7 per cent; and the £614.6m AXA Framington American Growth, at 5.9 per cent.

Adviser says...

Paul Coffin, wealth manager at London-based Capital Financial Markets, said: “The performance of the Income fund has not been great over the past six months, but the three- and five-year performance is good. The fees are reasonable and the dividend is in line with what would be expected for an income fund. You may find higher, but this portfolio does also have a good proportion of international holdings, and these often have lower yields.

“The Growth fund has been a good performer over three and five years, and since inception has significantly outperformed the benchmark. Again, fees are reasonable, and it has a good asset allocation in that a significant proportion is committed to global funds where future growth is likely to come from. The list of holdings, at 25, is focused.”