Alan Durrant does not hold back in his criticism of the financial services industry – specifically companies’ “serial habit of finding places to cause both themselves and their clients quite a lot of mischief”.
Certainly the industry as a whole has a history of making headlines for all the wrong reasons.
So when it came to the acquisition of discretionary fund manager (DFM) Wellian Investment Solutions by Mr Durrant’s Harwood Multi Manager in May 2015, he explains he was careful to look for a pure fund-based business that was not involved in the kind of products which have a tendency to “blow up”.
Harwood has been on the acquisition trail since Mr Durrant and his colleague Richard Philbin sat down three years ago to discuss where regulation and market forces were going to take the industry.
“We said it was very clear to us that there was a significant and chronic movement towards the outsourcing of investment management, and particularly into the multi-manager/fund-of-fund space,” he recalls. “Richard and I have both got 20-year backgrounds in exactly this space. We’ve both done a number of things, but they tend to revolve around building multi-manager-focused businesses.”
Rather than take an organic approach they opted for a buyout strategy so they could move quickly. Since then they have made a number of acquisitions, with Mr Durrant emphasising the importance of finding a good DFM in the form of Wellian. Unusually, it is the Wellian name that is being given more prominence following the acquisition, with the Harwood name taking a back seat.
“Touching first on what we liked about it, they had excellent performance, they had a very sensible product range that really didn’t need a great deal of either expansion or trimming, and the investment team was a stable one – the guy who started the business, Chris Mayo, had been there from day one and was still the investment director, so there was a great deal of continuity in the business,” Mr Durrant confirms.
“It was available on most of the platforms we could have wanted, there was already a groundswell of external advisers that were using them, the asset base of nearly £200m was at critical mass.”
He admits there were holes in the business that they themselves recognised. “They didn’t have a unitised fund business and we did. So we had a fund business and not a DFM, they had a DFM and not a fund business. Put the two together, there was very little overlap,” he adds.
To avoid any confusion, the new company has only “one centre of investment excellence”, Wellian Investment Solutions. Since the deal completed they have been moving a number of their existing clients onto the Wellian platform.
The combined business today has about £250m assets under management, and over the past nine months work has been done to ensure readiness for the next stage of growth.