InvestmentsJul 27 2015

‘It’s great to be involved in a growing business’

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When Mr Marchant was promoted to chief investment officer at Canada Life two years ago, he was tasked with – among other things – growing its retail presence in the UK.

It’s a challenge he has relished as the role relies on being informed about what is happening in global markets.

He recalls: “I think what really got me interested in markets was when the Thatcher government started selling off state assets, so I put my student grant into British Telecom and made a few hundred quid. From then on, I decided that fund management might be an interesting career to pursue.”

Mr Marchant admits his decision to enter investment management may have been by design, but specialising in equities was more of an accident.

“Equities was the fashionable area to be involved in when I entered the City,” he says.

“Of course, it’s changed more recently and bonds have been a lot more attractive to people.”

Mr Marchant landed his first job as a junior fund manager at Equitable Life, where his focus was on UK equities.

He recollects: “I spent a few years doing that and finding my feet. Then I got the opportunity to start covering Japan and Asia and I had the chance to go out and live in Japan for six months back in the late 1980s.”

That period was “the last moments of the Japanese bubble, which was interesting times”, he recalls. “I spent a lot of that running Japanese and Asian equity portfolios through the 1990s , with a little bit of time looking at bonds as well.”

When he returned to the UK from Tokyo he continued working for Equitable Life until 2000, when unexpected events forced him to move.

Mr Marchant explains: “Equitable Life fell victim to a court case… which essentially made the company challenged in terms of capital solvency and it was forced to close to new business. The contract that managed its assets was [transferred] to what was Clerical Medical at the time, which [then] became Insight [Investment]. I moved across with that – as well as the global portfolios – to manage the ongoing relationship with Equitable Life and its portfolio.”

While the fund manager acknowledges there was much publicity surrounding the court case, he insists the move to Insight – where he became head of global equities – was “relatively smooth”.

A few years ago he left Insight to join Canada Life as it prepared to boost its UK presence. “I came across here as head of securities, which is essentially overseeing all the fixed interest and equity assets that we look after,” he says.

His role has extended to chief investment officer, as well as managing director of Canada Life Asset Management.

“The exciting thing about coming here was that it was a more diverse role as it was bonds as well as equities, and the chance to manage a quite substantial team of people,” he notes.

“As an organisation, it had ambition in terms of wanting to grow. [It was] very keen to develop in the retail market, which I’d seen happen to some extent at Insight.”

Canada Life also benefits from the financial clout and reputation of parent company Great-West Lifeco, Mr Marchant points out.

Nevertheless, it is quite a task establishing a name in an industry that is already fairly crowded and competitive, and he believed that in order to do this the company needed to have a range of portfolios that consumers wanted to buy.

He elaborates: “We set about tidying up our range of funds a couple of years ago. We closed one or two funds and then we launched a range of Portfolio funds, which I’m the manager of. We also launched various income funds – Global Equity Income and Global Bond – as well as the Portfolio funds.

“We had a lot of good people here already, so it wasn’t about reinventing the wheel in terms of changing personnel but we have invested in the team.”

The Portfolio fund range was launched in November 2013 as an open-ended investment company for the retail investor market. This range has been designed with advisers and investors in mind. “A simple, low-cost solution for financial advisers is what we’re trying to achieve,” Mr Marchant says.

“And the good news is they’ve got off to a very strong start. [It was an] excellent year in 2014 in terms of performance and we are now seeing the benefits of that. Fund flows so far this year have been significantly up on last year, which itself was well up on the previous year.”

With a range of funds that he believes are “fit for purpose”, the idea now is to keep attracting assets.

“I expect there will be fund launches in the coming years,” he says. “We’ve invested in marketing and distribution as well, so we’ve expanded the team there. It’s about getting our name better known in the retail marketplace, highlighting what we do well, getting out there and telling people about it.”

He intends to make use of the company’s parent, which also owns Putnam Investments in the US and Irish Life in Ireland, among other businesses.

Mr Marchant adds: “We want to look around the group, where it has capabilities that we think are appropriate for the UK market that we don’t do ourselves and bring those in. We have a Putnam Total Return fund on our shelf, for example.

“So we’ll look to utilise where we have strong asset management capabilities elsewhere in the group. We will also look to try and get our funds where we have capabilities out on the shelves in Europe and Canada.”

It’s a business with growing ambitions and Mr Marchant has certainly not shied away from the challenges. He acknowledges that there are plenty of industry obstacles still to navigate.

“The challenges are that we’ve always got to make sure performance is fit for purpose,” he says.

“The market is very competitive and we’re not the only company with some good funds. [There are] lots of challenges in terms of new pressures on costs from increased regulation and oversight that we all have to deal with. Making sure that we are always focused on the consumer and what they want.”

But he states that the business will continue to grow and launch funds, although there are no new products on the horizon this year.

Mr Marchant is quick to answer when asked whether he has a career highlight, and if it’s a particular role he has held or a defining moment.

He says: “I have to say – and I would say this, wouldn’t I – that I do enjoy my current role. I’ve enjoyed my career throughout and investment management is a fantastic business to be involved in.

“You get the opportunity to meet very senior people in companies, and to travel and see what’s going on in different geographies.”

He continues: “As regards highlights, I think my current role has to be my favourite as I’m in touch with so many different asset classes and regions. We’re a growing business, so we’re acquiring assets. Assets under management have gone up quite sharply in the five years that I’ve been here.

“It’s great to be involved in a growing business that has the support of a very wealthy parent,” he adds.

Ellie Duncan is deputy features editor at Investment Adviser

CV

David Marchant

2013 – present

Chief investment officer, Canada Life Limited, and managing director, Canada Life Asset Management Limited

2010 – 2013

Head of securities, Canada Life Investments

2001 – 2010

Head of global equities, Insight Investment

1999 – 2001

Assistant general manager, Equitable Life

1985 – 1999

Head of fixed income and head of Far Eastern equities, Equitable Life