Investments 

Orbis eyes up DFM launch

Orbis eyes up DFM launch

Orbis Investment Management is considering how to adapt its proposition for a market dominated by multi-asset funds and discretionary fund managers.

The company's head of UK retail, Marcel Bradshaw, said Orbis was reluctant to launch new funds on a whim, warning there was a danger of falling victim to "fads", but he said the company could adapt its existing offering.

For example Mr Bradshaw said Orbis, which launched to the UK intermediary market last year, was considering launching a cautious fund to side alongside its Global Equity fund and its Global Balanced fund.

He said: "We don't have a fund family and so we need to look at all of the risk profiles. At the moment we don't have a solution on the cautious side. We have got something on the balanced side and on the growth side we have got the Global Equity fund.

"Where I am also spending a lot of time and what I am thinking about is outsourcing to model portfolios and DFMs. What we do know is its popularity is growing because of the new Mifid II rules. You cannot get an email from your clients to do the rebalancing, you have got to do a new cost benefit analysis. So we are thinking about whether we can play in this space.

"But I don't think we will play in this space if we cannot do it differently. We won't do it just for the sake of it."

Mr Bradshaw said Orbis's thinking was "more advanced" on the prospect of launching a cautious fund, adding that this would be important to allow the company to operate in the drawdown market.

Orbis differentiates itself from other fund managers through its charging structure, where investors only pay fees when its funds outperform and receive a refund if they underperform.

Mr Bradshaw acknowledged this fee structure might "make life a little bit awkward" for Orbis and advisers interested in its funds because of the time involved in having to explain it.

But he said: "You only change a paradigm by doing something which is different and which feels awkward initially. We do complicate matters for financial advisers but we are getting traction from independent thinking advisers who are willing to think outside the box.

"We are comfortable with the fact some advisers will not like our charging structure. We are not going to be for everyone."

Over the two years since Orbis launched in the UK intermediary market, it has been attempting to get itself onto platforms and its funds were recently added to Nucleus.

Orbis was founded in 1989 in South Africa and currently has £28bn of assets under management.

damian.fantato@ft.com

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