Interview: Ed Rosengarten

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Interview: Ed Rosengarten

With that firm, Eden Asset Management, soon being bought by City Financial, Mr Rosengarten moved on again to Smith & Williamson (S&W) in 2014.

Mr Rosengarten explains: “They wanted to create a role that brought the fund managers together – with those doing sales, marketing and distribution under a single head, which happened to be me.”

His first job in the new role was to assess the fund management offering at S&W and consider which managers were delivering against their objectives and mandates. He describes going through the range “with a fine-toothed comb”.

As a result, the firm hired Tim Day and Chris Ford, former co-heads of global equities at Pictet Asset Management, to run S&W’s North American Trust and the Mid Ocean World fund. 

The business went through that process within the first 12 to 18 months of his arrival, before attention turned to sales. 

I think it's quite important you give access to managers in a way that other groups, for the obvious reasons, struggle to do

“This involved looking at where we’re strong, what the opportunities are and drawing in new people where we feel we’ve got areas we need to develop,” he adds. “That pretty much drew to a close six months ago. Earlier this year we hired two additional sales people from Capital Group and a couple from Liontrust.

“That’s about recognising the best way we are going to be able to successfully market and sell our funds is through independent discretionary fund managers (DFMs) in the UK. These are the clients we think we’ll be most able to connect with.”

Mr Rosengarten notes it’s important for the DFM market to easily communicate with, and get access to, S&W’s fund managers. “Managers are more than happy to engage with the DFM market whether it’s on the conference circuit or regional one-on-ones. I think it’s quite important you give access to managers in a way that other groups, for the obvious reasons, struggle to do.”

He highlights the firm’s flagship funds: the S&W Short Dated Corporate Bond fund managed by Ian Kenny, and Tineke Frikkee’s £53m UK Equity Income fund. But he also expresses the need to increase the assets under management in some portfolios – from around £50m to closer to £100m in the case of Ms Frikkee’s fund. She had been running billions of pounds of assets at BNY Mellon, which she left to join S&W in 2013.

He believes: “It’s about connecting with more clients, intermediaries and independent DFMs in particular and you probably need to extend your distribution team and some other hires to give you those connections, so there are some interesting conversations going on about that.”

At the start of the year, Mr Rosengarten told Investment Adviser the company was considering launching a European equity long/short fund for Giles Worthington.

He says: “I like a high-conviction approach to long portfolios in the equity space. I also like a long/short, non-directional stockpicking approach. We do that very successfully in the UK and we are considering doing that in Europe, but there’s no hurry. We see it as an interesting opportunity over the next period.

“Obviously the bigger firms can produce product after product after product. We’re very much fund manager and investment-led. When the fund manager feels comfortable, feels confident and feels there’s an opportunity out there for them to generate returns, then we consider how we develop that.

“But I don’t see product development or new funds as being the cornerstone of our growth opportunity here,” he points out. 

“It’s frankly about great managers connecting with the external market in a high-touch way and gathering assets in a sustainable fashion. That’s the mandate I’ve been given here, that’s what it’s about; it’s not short-term, it’s not quick fixes, it’s not ideas on a whim, it’s not faddish. It’s more considered and more long term.”

One area he is exploring though is the acquisition of funds or fund management businesses. He admits it is “low down” on his list but that he is keeping an open mind.

“It’s sensible that we’ve not talked about it because it’s not a significant part of our strategy,” he notes. “However, there are some smaller businesses out there, and I have spoken to some, where I think we could be a really interesting home for the fund managers and the funds. S&W is in a strong [financial] position and there are opportunities for us to attract entities on a fairly rare but occasional basis.”

He adds: “In my former life at City Financial we did acquire a small fund management business and it can work really well. You see quite a lot of corporate activity in this sector and I like to feel we are one of the potential recipients or acquirers of those opportunities on a very discerning basis.”

Elsewhere, he has ambitions for S&W to engage with the Swiss market on what he refers to as “a selective basis from a funds perspective”. Mr Rosengarten has experience of launching in Europe, having been part of a similar initiative at M&G. 

“I think it will be interesting to see what they think of a UK long/short equity fund,” he muses. 

“It’s a new initiative for us and will probably get going in the early part of next year.”

It seems the entrepreneurial traits honed at Eden and City Financial have stayed with him, although he admits the “entrepreneurial journey… is not for the faint-hearted”.

“I felt Smith & Williamson had all the elements I liked, it was a growth mandate for a start which at M&G I loved, the entrepreneurial flair and opportunity was there through Eden and City Financial, with the backing of a really substantial, long-standing parent that does nothing but encourage you to make decisions you believe in.

“That’s the challenge with some of the bigger companies, you want to do stuff and it can be difficult,” he suggests, hinting at why he left  M&G. 

But he reveals: “The truth is I absolutely loved the whole journey of M&G from 1992 to 2010 because a lot of it, in fact most of it, was being given a mandate to build something. The pivotal moment of course was when the Pru took over M&G in 1999 and I was asked by Michael [McLintock, former chief executive] to lead the integration of the fund management businesses there – no one was more surprised than me.”

When asked about what challenges he faces at S&W, Mr Rosengarten acknowledges he worries about creating the right atmosphere at the firm.

“Culture is probably the wrong word, just the work environment for people. It’s a friendly environment – S&W is delightful in that way. And why do I worry about that? Because you want to make sure you hang onto the fund managers. We’ve seen it time and time again in this industry, it’s really difficult to hang onto managers if you’ve got it wrong,” he says.

Having poached a few fund managers himself in his current role, he should know.

This feeds in to Mr Rosengarten’s belief that S&W should not see itself as a specialist player.

“At the same time we’ve got a unit that has its own identity,” he adds.

“Some call us a boutique, I don’t mind that. Boutiques can conjure up a single-strategy approach, which has been very successful for some. But that’s not us, we’ve not pursued that approach, we want some breadth.”