When Stephanie Butcher became chief investment officer for EMEA at Invesco at the start of 2020, she was stepping into the role when the world was just becoming aware of the implications of the Covid-19 pandemic, and when Invesco was itself dealing with what she politely calls “legacy” issues around high-profile fund managers and some underperforming products.
The company was still operating in the shadow of the departure of Neil Woodford, and his replacement with Mark Barnett.
Now, in 2023, she has become global co-head of investments, a role that involves her jointly overseeing not just the investment team but also the trading desks and other front office functions for the entire $1.5tn (£958bn) operation.
She says: "I think that while there have been some high-profile investors at Invesco, we now regard the concept of the star fund manager as a bit legacy.
"My view is that a strong fund or franchise of funds is one that is run by a team. And it is part of the remuneration conversation we have with our fund managers, about the extent to which they are collaborating and being team players.
"Frankly, it is in the clients interests that we have a team-based approach, [and] that there is stability and continuity."
As a woman, that was one of the appeals of fund management: having a set of numbers against my name to easily demonstrate what I can do.Butcher says she learnt these lessons during her own time as a European equity fund manager during the sovereign debt crisis of 2011, “when that’s happening, you need to know your fixed income team very well.
"We were, as equity investors, meeting European bank chief executives very keen to have our bond guys in that meeting. And that’s part of the culture we are trying to create here now. If a person on one part of the investment floor sees a bit of research they find interesting, I want it shared across all the teams, fixed income, equities etc, and debated.
"There needs to be an end to the silos. And it’s the same with geographies. We want the US and UK and Asia operations to be one team.”
Shaking things up
This inclusive language belies the steel behind Butcher’s approach: a number of established investors, including Barnett, have left the company, and funds have been merged.
She says her priority when creating the investment teams is “to act in the way the client wants. If a fund is in line with what a client wants, it gets inflows, if not, then it doesn’t. So that is always at the centre of how we think about it. And I think clients now are much more sophisticated than in the past.
"There has been a blurring of the line between a retail and an institutional client because the retail client is more informed. And that fits into how we are trying to position Invesco; its not about a fixed income team or whatever in Henley, its about creating a community of investors.
"It is also, I think, important for our clients to know that it is not just a bunch of people siloed in Henley."
Butcher is a senior managing director at the firm, and part of the executive leadership team, among the others with that title are her co-head of investments in the US, and the global head of distribution.
No one has replaced Butcher in her previous role as chief investment officer for EMEA, as the focus is on taking a more global approach to investment management and client services.
It is testament to Butcher’s analytical nature that she describes the move from managing money to leading a team as: “running a portfolio of companies, to an extent, to running a portfolio of people. It’s about seeing the best in people and bringing it out in them.”
I don't think its a case that any box is ever fully ticked, its always an iterative process.
She rejects the suggestion that in the era when Woodford ran £33bn of client assets from Henley that Invesco was too reliant on UK equity funds, saying that the profile of the individuals created that impression but that the business was always more diversified.
But she does agree that its “probably a good thing” that clients are generally more diversified in their portfolios right now, rather than be over exposed to the UK – though she adds that one of their UK equity strategies, UK Opportunities, is currently getting net inflows, despite the exodus from UK equity funds in the industry more generally.
A hint as to her leadership style and temperament may also be found in her remarks when asked about what is on her to-do list for the coming year.
She notes: "I don't think its a case that any box is ever fully ticked, its always an iterative process."
ESG: blurred lines
Another area that has come into her remit is ESG; a part of the market that attracted significant inflows across the first two years of Butcher’s time as chief investment officer.
But in 2023, Morningstar data shows that across the industry there have been outflows from ESG mandates, and a profound debate around the future scale and value of the sector has begun.
Butcher says: “The reality is that what clients want will determine what happens. But I do think there has been an issue with lines being blurred. My view is that anyone who is managing money needs to consider the financially material environmental risks.
"Frankly, if you are investing in an oil company but not considering the environmental impact, then you are not doing your job.
"But that is different to clients who want ESG to be the primary factor in how their portfolio is constructed. And I think in some parts of the industry the line between those two things got blurred in recent years.”
As part of her determination to foster co-operation across the company, Butcher has encouraged the creation of networks, such as the women’s network she helped to found within the company, and networks focused on social mobility and mentoring.
She says: “When I came into this industry 30 years ago, there were none of those things. It’s great those things exist now, as they help to encourage meritocracy.
"I am still very involved in the women’s network here. I have had some great bosses, but I think the greatest challenge often for a woman is, 'Do I think I’m up to it?' And that’s why mentoring is very useful.
"Make no mistake, asset management is a tough industry; for a fund manager, your performance is there on display every day. But actually, as a woman, that was one of the appeals of fund management. Having a set of numbers against my name to easily demonstrate what I can do.”
Invesco is one of the behemoths of the fund management, but had fallen somewhat from the public’s consciousness.
If Butcher and her colleagues can restore it to its former prominence, then Invesco will play a substantial role in advisers lives in the years to come.
David Thorpe is investment editor at FTAdviser
