Sat in a big tent in the middle of a Guildford field watching a stage production is not what you would typically expect to find on the to-do list of a business development head.
But the night before his interview with Financial Adviser Lawrence Cook was doing just that. He was watching the Legend of King Arthur, a play staged by the Guildford Shakespeare Company.
He was actually helping an adviser host several lawyer and accountant client contacts, one of the many ways he said Thesis Asset Management tries to strengthen the tripartite relationship with advisers and their clients.
Since he joined the company in 2012, Mr Cook has focused on growing the number of IFAs Thesis deals with and rolling out new products.
More recently, the company has started to embark on a major acquisition strategy.
Thesis has made its first purchase in a long time – Bath-based Cambridge Fund Managers – in a deal that should complete by the end of the year. In addition, Thesis has three other firms in the pipeline that it is looking to progress towards the end of this year and the start of 2018.
Increasing regulatory burden has been a big driver towards acquisitions.
Mr Cook said: “That issue of added regulatory requirement, seen by some as a burden, is leading to a boom for us because people are saying ‘can you come and buy us?’
“The depth and breadth of regulation is causing smaller DFMs to pause and think; ‘do I still have the scale in my business to cope with it?’ We do have the scale and competence.
“It has been an attractive proposition for smaller DFMs to come along, saying; ‘I am not Mifid II ready.’ If you add SMCR, GDPR and client asset/money regulation, all of that is sensible regulation that we think is appropriate, but for a small business is quite difficult.”
This focus on acquisitions at Thesis follows the management buyout the business underwent in the summer, following a year where profits fell 26 per cent, mainly due to increased expenses. The shareholders now include family officeJ Leon and Co and Ventiga Capital Partners, which have injected capital into the business. The company is investing further in infrastructure, systems and platforms and projects. Alongside the acquisition play, Thesis maintains its plan to add more adviser clients.
Again, regulation has given that part of Thesis’s strategy a boost, Mr Cook said.
The scale of work advisers have to do, particularly concerning changing or recommending a feature in an investment portfolio, means a significant number do not have the resources to simultaneously do client follow-ups and grow their client-base.
As a result, more advisers are passing their businesses to DFMs such as Thesis.
From a handful in 2012, Thesis now manages investments for around 200 IFAs. The company has also grown from having no service on wrap platforms to working with nine. Its total assets under management now exceed £14bn.
Where the company stands out from its peers, according to Mr Cook, is that it offers more of a consultative approach because it has a range of services comprising bespoke, model portfolios and unitised solutions.
Mr Cook said: “The fact we have all three is not unique, but it is unusual. If an IFA says; ‘I have bought your story as an investment house and I like what you do, but I need to use your investment solution across a range of different services, because it meets the needs of different clients’, the fact we have bespoke, model and unitised it means they get greater coverage.
“We do not have a pre-ordained idea of what a good sale looks like for us. That can be a wide range of funds; passive or active investment management, plus we are willing to customise and build something new for an IFA.”
Attending a play may be something Mr Cook occasionally does, but his day-to-day activities find him visiting Thesis’ four UK branches, speaking to his team about adviser relationships and continually reviewing client accounts.
Another big development at the company is that it now offers an Alternative Investment Market (Aim) product – one of two it has recently worked on.
Adviser clients who invest in certain Aim-listed shares will be able to benefit from business property relief, a mechanism that helps investors avoid paying inheritance tax when they pass on their holdings to their heirs.
This is providing they have held their shares for more than two years. It is also four years since a rule change allowed Aim-listed shares to be held within a stocks-and-shares Isa.
Mr Cook said: “The expertise you need from a DFM is that only certain name stocks qualify. There are all sorts of exceptions to the rule; it is our job to make sure the portfolio has stocks in it that qualify for this relief. You also want to invest in stocks that are more likely to go up and down.
“We have a track record in larger, mid and small caps, so it is a natural extension of going into the Aim market. We have already been running our research model on the Aim portfolio for many months internally, so it is not as ifwe are suddenly doing it and saying let’s hopeit works.”
Ima Jackson-Obot is a features writer of Financial Adviser
Lawrence Cook's career highlights
2012 – present: Director of business development and marketing, Thesis Asset Management
2010 – 2011: Manager, wealth adviser, Towry
2009 – 2010: UK sales director, TIS Group
1984 – 2009: National sales manager, Standard Life
