Comparisons with Edward Bonham Carter, who held a similar dual role at Jupiter Asset Management a few years ago but gave up fund management responsibilities when his own performance tailed off, have been rife.
But the down-to-earth Mr Buxton is eager to stress that the additional position he has taken on at OMGI “isn’t a traditional chief executive role”. And he is even more adamant that he is “not like Edward Bonham Carter”, though he is an admirer of the Jupiter vice chairman.
He explains: “I’m never going to have [Mr Bonham Carter’s] role or responsibility. So I think I can do both [jobs] and since investment is my first absolute joy and passion, then I’d like to think I will carry on investing. If I am proven wrong and I find I can’t do both roles then it will be the chief executive role that goes and I will revert back to just being on the investment side. That wouldn’t be an issue for me – it’s not an ego thing.”
As part of the raft of changes announced by Old Mutual Wealth, the company has created an investment division headed up by Martin Baines, formerly chief executive of its discretionary arm Quilter Cheviot. David Loudon has stepped up to replace him at Quilter, while Warren Tonkinson has been promoted from head of distribution to managing director of OMGI.
Mr Buxton completes the overhaul at OMGI and he emphasises that he is not a direct replacement for his predecessor, Julian Ide.
He explains: “This is part of bringing together OMGI and Quilter Cheviot in a new investment division of Old Mutual Wealth. Both are going to continue to be separate businesses, branded separately, but in one investment division of Old Mutual Wealth. I’m stepping up to run, in inverted commas, OMGI.”
But whereas Mr Ide was on the Old Mutual Wealth executive committee while he held the job, Mr Buxton will not be. Instead, the former Schroders manager now reports to Mr Baines, who will represent both Quilter Cheviot and OMGI on the committee.
“Why take the role and the additional responsibilities? It isn’t as scary as the words ‘chief executive officer’ imply,” he remarks.
“The reason that Paul Feeney, who is chief executive of Old Mutual Wealth, wanted me to do this job in this new structure is precisely to have an investor front and centre stage of the investment management engine – I hate the word – at the heart of the business,” he continues.
“It is to be clearly demonstrating both internally to other investment desk heads and externally to our client base, and so on, that it’s all about investment leadership and that we are a genuine investment-driven company. We’re not a kind of distribution machine, we’re an investment house.”
His new role is certainly well defined, but many in the industry might feel like they’ve heard it all before.
So how exactly will the UK equity manager divide his time to ensure his portfolios are not compromised?
Mr Buxton is clear about how he allocates his time and how this might change when taking into account his extra responsibilities.
“I’ve always said about 65 per cent of my time is on investment, although that’s a very broad category. And maybe 25-30 per cent of my time is on meeting clients, marketing, and roadshows. And maybe there’s 10 per cent that’s team, business, management [duties].
“I don’t want to quantify it too much but I’m confident that next year I [will] reduce quite significantly the marketing and roadshow activity. It’s time for my colleagues Errol [Francis] and Ed [Meier], who effectively co-manage the fund with me, to be out there more and raising their profile.”
He says this plan means he will still spend more than half of his time involved in the investment side of things. He is quick to reassure investors of the capabilities elsewhere within the UK equity team. As it stands there are 16 people at OMGI’s London office devoted to UK equities, he confirms.
With some of these colleagues having worked with the manager for the past 10 to 20 years, he is confident they are able to step in and make decisions about the portfolio if need be.
“Even in the past 12-18 months, if I have been out on the road marketing, and an event occurs that the guys know I would be active in, they don’t have to wait and ring me, they just do it because they know that’s what I’ve been doing.”
Many investors will have already observed his UK Alpha fund has had a run of recent underperformance. Data from FE Analytics shows that in the 12 months to August 26 the vehicle is down 4.9 per cent, while the IA UK All Companies sector has fallen 0.9 per cent.
Mr Buxton readily admits near-term performance has been “dire”, although he suggests “it’s not a disaster”.
He points to holdings that have disappointed, such as Tate & Lyle and Rolls-Royce, both of which have suffered a series of profit warnings.
“While there’s still lots of good stuff going on in the fund, if you’ve got four or five things that are really suffering in a concentrated portfolio then it does tip the balance a bit,” he notes. He has also been adding to his positions in pharmaceuticals firms AstraZeneca and GlaxoSmithKline, as well as telecoms provider Vodafone.
Meanwhile, there are other issues for Mr Buxton to address. For example, Old Mutual Wealth has already said bringing together OMGI and Quilter Cheviot presents an opportunity “to leverage the investment knowledge of both businesses… particularly within the multi-asset areas”.
The manager does not rule out changes to the firm’s retail funds in the space as a result, although “no decisions have been made at this juncture”.
He notes: “It’s an area where we’ve been doing a lot of work analysing and thinking about the best propositions, because clearly Quilter [Cheviot] has capabilities in that area, and clearly we do too. We are looking at where the best capabilities are, and where it is most logical for manager research to sit against multi-asset investment solutions.”
Change is afoot not just in multi-asset. Old Mutual has made some high-profile fund manager hires in the past 12 months, including the appointment of Joshua Crabb from BlackRock to head up its Asian equities team and Russ Oxley from Ignis as head of fixed income/absolute return.
There have been conflicting reports in recent weeks on the firm’s future hiring intentions, but the sense is a bedding-in process has now begun.
Mr Buxton outlines: “For the next 12 months, I’m not saying we’re not going to hire anyone, but we’ve got to start to infill those product capabilities as a top priority. We’ve made the investment in building the capability and we’ve got to start bringing some assets on board.
“We’re still going to be out there talking to people and having conversations, but I think we’ve just got to recognise there was an awful lot [of appointments] in a very short space of time and we need to see some of that bearing fruit in terms of growth in the funds under management before we start hiring additional capabilities.”
Mr Buxton’s arrival at OMGI in 2013 kick-started this flurry of hires. At the time he said the move would be his last big job in the industry, and he admits that the change of responsibilities was not part of his original plan.
“I was saying this is my last job in the City [and] OMGI is the last place I’ll work unless something horrendous happens,” he says.
“After 11 years at Barings and 12 years at Schroders… I’ve got one more big job in me.”
CV
Richard Buxton
August 2015
Chief executive, Old Mutual Global Investors
2013 – present
Manager, Old Mutual UK Alpha fund and head of UK equities, Old Mutual Global Investors
2001 – 2013
UK equity manager, head of UK equities, Schroders
1990 – 2001
UK equity manager, then head of UK equities, Baring Asset Management
1985 – 1990
Fund manager, fixed income, then equities, Brown Shipley Asset Management
