17th September 2014

Fund management industry braced for more solo ventures

The following story recently featured on the FTAdviser.com website:

The investment industry looks set to welcome a flurry of new companies as firms offer their services to star managers keen to set up their own ventures.

RC Brown, the Bristol-based discretionary manager, has become the latest firm to offer infrastructure and administration support to fund managers who are looking to go it alone and reap the full benefits of their investment skills.

The move comes after star manager Neil Woodford last year quit major fund house Invesco Perpetual and used private equity firm Oakley Capital to incubate his new firm, Woodford Investment Management.

RC Brown founder Bob Brown said the firm had already facilitated the launch of one business, on behalf of a former Rowan Dartington investment team, and that it was “having a number of discussions” with an eye to further launches.

The development threatens the UK’s most established fund houses, which continue to fret about the so-called ‘key man’ risk – that their biggest-name managers leave, taking billions in client cash with them.

However, it could inject a dose of entrepreneurialism into the industry at a time when some are concerned that an increasingly small number of players are controlling a growing share of the market.

The former Rowan Dartington Signature team launched Alpha Portfolio Management last year and continues to use RC Brown’s offices, admin support and FCA registration.

Mr Brown said that while the firm is happy to provide services for start-up businesses, its focus will be on attracting established managers who are looking to strike out on their own.

As well as planning to incubate new business, RC Brown is also looking to broaden its investment portfolio management offering.

It recently took on the responsibility for promoting its UK Primary Opportunities fund, which Marlborough Fund Managers had been promoting on its behalf since 2005.