Investments  

‘It gets more prescriptive in the big [fund] houses’

Liontrust has been steadily expanding its UK retail offerings through team buyouts over the past few years, under the leadership of chief executive John Ions. April 2016 saw the latest stage of this strategy, the company acquiring Argonaut’s European Income and Enhanced Income range.

The funds and their manager, Oliver Russ, are to join the business next month. The deal will take Liontrust’s assets under management to just above £5bn.

Mr Ions notes: “We’ve grown the business from £1bn five-and-a-half years ago to more than £5bn. A bit of that’s organic growth – a little bit through acquisition and also by attracting new teams where we can.

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“[Mr Russ] is a fund manager with a very clear strategy. He’s got £300m of assets and a good following across our investor universe.”

The fund house is among the most active when it comes to buying in new strategies. In April 2015, Liontrust poached Kristof Bulkai, Patrick Cadell and Hugo Rogers from BMO Global Asset Management to launch a Global Strategic Equity fund and other alternative investment products.

Mr Ions says that being a smaller, more “personalised” business has worked in Liontrust’s favour.

He explains: “I think the key selling point was that we try as best as we can to create the right environment here – especially for the fund managers – which is to be able to run money the way they want to run it as long as they have a good, strong process that we believe in.

“We don’t have a chief investment officer so we don’t have to follow the house view. I think that from a fund management point of view it gets more and more prescriptive in the big houses.”

He suggests that understanding how managers run money and allowing them the freedom to do so creates a different environment from the majority of other fund groups. Part of the attraction is that Liontrust also offers managers and their products routes to market.

When looking to broaden its existing fund offering or to launch an entirely new team or product, the issue Mr Ions faces is building up a track record.

He says: “If we’re getting a new team on board, it takes three years to get a track record if you start from zero. You start with a smaller amount of money, and therefore you exclude some of the larger clients who won’t buy funds until they’re north of £100m in size.

“It’s not something that we won’t do because we’ve just done it with the global strategic equity team that we took on from [BMO]. But if we can get to a point where we can find somebody who has a good track record and comes with assets – to be able to put that into the distribution machine we have here to be able to grow that and take it forward. The downside is that it’s rare to come across opportunities like that.”