MULTI-MANAGER
BY: MAHA KHAN PHILLIPS
PROFILE BY: STUART NEWMAN
M
ulti-managers invest in other while managers-of-managers growth was over time,” explains Steve Delo,
fund managers to create much lower, at 18%, according to the president of the Pensions Management
diversifi ed portfolios for their Cerulli report. Institute and chief executive of PAN
clients. Th ey entered the European “Multi-manager has had an upward governance, who is also a veteran of the
market about fi ve years ago, but have swing in the last 10 years, but we have multi-management business.
been more fi rmly entrenched in the US picked up the low hanging fruit. We’re Joanna Munroe, CEO of HSBC
for some time. Assets under management now competing with big conventional Multimanager, an arm of HSBC Global
at multi-management houses increased asset management houses. We should Asset Management, argues that the value
33% to US$1.6 billion in 2006, continue to take market share if we proposition of multi-manager is still
according to Cerulli Associates, meaning generate good performance,” explains strong. “Most people and institutions
that multi-managers are still a small Steve Wiltshire, chief investment offi cer, need a portfolio that is relatively all
percentage of the total investment multi-strategy solutions at Russell. weather, and we have moved away from
industry. Larger players like Russell and But during the credit crisis, multi- traditional global balanced products to
SEI dominate the market. managers are fi nding it harder to justify more broadly diversifi ed multi-asset
Th e business can be divided into two the extra layer of fees they charge, products. Multi-asset products have a
areas. Fund of funds, which are collective particularly as performance has generally real breadth of asset classes in it, ranging
retail schemes that invest in other been poor. “Pension scheme trustees who from property, hedge funds,
collective schemes, and managers-of- had their fi ngers burnt too many times commodities, diff erent types of fi xed
managers, which are funds or portfolios trying to select active institutional income as well as traditional products,”
that hand out bespoke sub-advisory investors felt there were advantages to she argues. Critics say multi-managers
mandates to investment managers. Fund selecting multi-managers. But they really need to think about their value
of funds posted a 44% increase in assets, haven’t delivered impressive performance proposition if they are going to compete
DAVID MILLEN, ASIP
Title: Director, Client Services
Current employer:
Russell Investments
Previous employers:
Are there certain skills you would consider useful for your job?
Clerical Medical;
Barclays Private Bank
A good understanding of investment theory and practice and
University:
preferably hands-on portfolio management experience. An active
Emmanuel College, Cambridge
interest in current affairs is a must and it really helps to be both a
Degrees: Masters in History
good listener and an accomplished presenter.
Professional qualifi cations:
ASIP, ACIS How do you think the role you’re in now will change over time?
I work mainly with pension fund clients and their circumstances
are changing at an unprecedented rate. They require more
What attracted you to this career path?
complex solutions and my role is changing to accommodate
An interest in investments and the way the fi nancial world works.
greater complexity. In particular, we are seeing greater demand
for fi duciary management.
What are the major challenges you face in your position?
Keeping on top of our clients’ changing needs and ensuring that we
Do you have advice for someone intending to pursue the same
provide our products and services to them in the most appropriate
career path?
way. Clients need to decide where to focus their own resources and
Get some familiarity with hands-on portfolio management, either
what functions and decisions to outsource to specialists like us. This
as an analyst, portfolio manager or trader. Direct experience of
conversation is key to striking the right balance for each client,
markets will prove invaluable. Experience in investment
according to their individual circumstances.
consulting is also a big plus.
28
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