Stephen Lansdown, co-founder of platform behemoth Hargreaves Lansdown, wants to make his latest venture one of “the largest investment management companies in the world" taking on active giants like Blackrock.
The firm, Ravenscroft, is a long-established stockbroker and wealth management business in the Channel Islands, and also manages a range of four funds.
It manages all of Mr Lansdown’s personal wealth, except his stake in Hargreaves Lansdown, which on Friday (29 September) he cut pocketing £190m from the sale of some of his shares.
Mr Lansdown became a shareholder in Ravenscroft in 2012, a director in 2015, and chairman in 2017.
He currently holds a 28 per cent stake in Ravenscroft.
The businessman said his experience launching and building up FTSE 100 financial services giant Hargreaves Lansdown, which dominates the investment platform market and turned a profit of £266m last year, has helped to shape his ambitious future plans for Ravenscroft.
He said: “It reminds me of when we were maybe three or four years in with Hargreaves Lansdown.
"Peter [Hargreaves, the other co-founder] and I were talking... deciding... did we want to continue as we were, a successful local firm, or try to become bigger.
"I thought we should focus on being the best, but learned that you need to be one of the biggest to be the best.
"I want Ravenscroft to be one of the biggest investment management companies in the world.”
Mr Lansdown said he got to know the firm when he moved to Guernsey and wanted a business to manage his money.
His greater involvement arose when he met with Mark Harries, an industry veteran who joined Ravenscroft as head of UK investment management in November 2016.
Mr Lansdown said: “Mark had worked at a lot of big firms. He spoke to me about maybe what his next venture might be, wanted to build something up. I think you could say he pitched me.”
Discussing his plans for the company, the 65-year-old emphasised that he is non-executive chairman.
He said: "I am there [in Guernsey] to help and to advise regularly.”
Two Ravenscroft funds have opened to investors in the UK, the Huntress Global Balanced fund, which is a multi-asset fund and the Huntress Global Blue Chip fund, a direct equity mandate.
Currently he has invested the maximum permitted amount, 10 per cent of the total fund size, in the Ravenscroft funds and so cannot put more cash in until the funds grow larger.
Mr Lansdown said he is aware of the challenges of launching a new fund business in the current regulatory environment, branding much regulation “superfluous”.
But he added companies can deal with it once they achieve a certain scale, and that Ravenscroft has the advantage of such scale already as the funds have more than £2bn of assets.
In asset management, he said “the big players get bigger, and lots of the small players stay small, but the middle tier that is left, it becomes an opportunity, and if you get to the middle tier you can grow to one of the big players.
"That is what happened with Hargreaves Lansdown, and what I am looking at with Ravenscroft”.
Ravenscroft continues to operate in the Channel Islands and there are no plans for it to move to the UK.
As well as issues of scale, a second barrier to entry faced by new entrants to fund management is the difficulty of getting the fund onto platforms, Mr Lansdown said.
Fund houses accuse platforms of requiring they show demand before they can join the platform, while advisers say the can’t buy a new fund unless it is on a specific platform.
But Mr Lansdown said advisers need to focus on what is best for the client, not what is most convenient for them.
He said: "The IFA is not thinking about the client, if the client wants to buy the fund, then find a way to buy it for them.”
He was equally dismissive of platform providers reasoning that it costs money to add smaller funds, saying: “I’m not going to kid you that that’s much of a reason”.
The Ravenscroft funds are global, thematic and concentrated.
Mr Lansdown noted that the £11bn Fundsmith Equity fund has been very successful in the global equity space with just such an approach.
"We are fans of Fundsmith, it is a holding in the Global Balanced fund, and has done well, and can continue to do well, but when a fund gets to that size, it takes a lot to make it outperform against a smaller fund.”
While many advisers may adopt the approach that, “no one ever got fired for buying Fundsmith", like the old adage no one ever got fired for buying IBM, he said advisers run the risk of missing out on a lot of gains from other investments that are less well known.
david.thorpe@ft.com
