Author: IIMI Admin
I am pleased to introduce this paper on the opportunities for decentralising fund management in the UK and encouraging regional growth.
Innovation by entrepreneurial UK asset managers in delivering access to investment markets via collective investment schemes has gone hand in hand over the years with the development of ever wider investment expertise. The lawyer Philip Rose founded The Foreign & Colonial General Trust in 1868, and Ian Fairbairn and George Booth launched M&G’s First British Fixed Trust in 1931 to replicate the resilience and popularity of mutual funds in the United States. Adaptation and evolution have continued over the years to allow UK asset and wealth management firms to remain competitive in delivering their investment expertise to different categories of client. Unit Trusts have morphed into OEICs, and front end charges and bid/offer spreads have disappeared.
Both fresh and familiar challenges, from the COVID economic shock to Brexit, are emerging which make the UK ripe for a new generation fund structure which could also be a catalyst for industry and job growth in servicing the assets invested in a new UK domiciled fund structure.
Nick Mottram
Chairman, New City Initiative
Partner & Chairman, Dalton Strategic Partnership LLP
IIMI, the boutique asset management think tank, is calling for the development of a UK fund structure that could compete with UCITS and AIFs in Asia-Pacific (APAC), in order to strengthen the global distribution footprint of UK funds and their position in the region. The full paper, entitled “Facilitating Connectivity: Strengthening UK- APAC Fund Ties”, can be found here.
IIMI also proposes that the UK should further leverage the Mutual Recognition of Funds (MRF) scheme with Hong Kong while negotiating further MRFs with other critical markets, most notably China. In addition, the UK should become a signatory to at least one or both of the Asia Region Funds Passport (ARFP) or ASEAN Collective Investment Scheme (CIS).
Background
The UK’s asset management industry manages around £400 billion on behalf of clients in APAC. Currently, many of the UK investment products that are sold to institutional and retail clients in APAC are regulated under EU law, principally either UCITS or the Alternative Investment Fund Managers Directive (AIFMD).
Previous uncertainty about the future of delegation and the EU’s ongoing refusal to extend the much vaunted AIFMD marketing passport to core APAC jurisdictions (namely Hong Kong and Singapore) have damaged the EU’s reputation in APAC circles.
As a result, some experts see this impasse as an opportunity on which the UK can capitalise. In addition, should post-Brexit equivalence fall short in trade negotiations, the impetus for the UK to create its own fund regime and to build in mutual links with APAC, and the rest of the world, becomes greater.
Proposals
IIMI believes that there are several ways in which the UK funds industry could strengthen its distribution footprint in key APAC markets, where many of IIMI’s members see a large growth opportunity:
- UK policymakers/regulators should capitalise on the UK funds industry’s opportunity to further cement itself in APAC by developing a UK-own fund brand to compete with UCITS and AIFs in the region.
- The establishment of such a UK fund brand will require input from industry and government, and this is something the IIMI is willing to facilitate in coalition with other associations and market participants. The process of setting up this new fund structure will not be easy, but IIMI believes it is certainly achievable.
- The UK should further leverage the MRF scheme with Hong Kong, and regulators ought to negotiate further MRFs with other critical markets, most notably China.
- The UK should become a signatory to a regional fund passporting regime such as the ARFP or ASEAN CIS in order to maximise its APAC distribution footprint.
“IIMI believes the UK funds industry has an excellent opportunity to further embed itself in APAC, where a number of our members see the largest growth potential. Developing a UK fund brand to compete with UCITS and AIFs in the region would be one way of doing this, and would be beneficial for the UK and Asian economies. As the representative of leading owner managed firms in the UK and Europe, IIMI has already extended the UK fund management community’s links with APAC through the 2019 launch of IIMI Singapore, and we are keen to build on this.”
Nick Mottram, Chairman of IIMI
ENDS
Despite the relentless political uncertainty gripping the UK, the country’s position as one of the dominant centres for investment management in the world remains unaffected. Second only to the US by size, the UK’s asset management industry is responsible for overseeing £7.7 trillion in capital, of which £3.1 trillion are mandates on behalf of foreign investors, a figure that is largely unchanged since 2017. The European Economic Area (plus Switzerland) accounts for the majority (59%) of the foreign sourced assets controlled by domestic UK fund houses although non-EEA capital comprises a large proportion of that AuM total too.
IIMI, the boutique asset management think tank, announces the appointment of Nick Mottram as Chairman, effective 1 December 2019. Nick succeeds Jamie Carter, CEO of Oldfield Partners, who will remain on the board.
Susannah de Jager continues as Deputy Chairperson, and has been joined in the role by Sebastian Stewart, Head of Client Services at Somerset Capital Management.
Nick Mottram is the Chairman and Global & Asian Equities Fund Manager at Dalton Strategic Partnership, having joined the firm in March 2010. He has over 30 years of investment experience, with other senior roles including Founding Partner at Origin Asset Management, Head of Equities at Investec Asset Management and Global Head of Research at Schroder Investment Management. Nick is a Chartered Accountant and has a degree in English from the University of Kent.
Sebastian Stewart is a Partner at Somerset Capital and Head of Client Services, having joined the firm in 2012. He graduated from the University of Edinburgh with a first class degree in Mathematics and Business Studies and is a CFA charterholder.
Founded in 2010, IIMI speaks for owner-managed firms concerned with the alignment of interests with clients, and aims to offer an independent, expert voice in the debate over the future of financial regulation and competition.
“Dalton Strategic Partnership has been a member of IIMI for many years now and I have always been impressed by its focus and work. Jamie Carter has left IIMI extremely well placed going forward and I would like to thank him for his leadership.
“I look forward to meeting with the membership and continuing IIMI’s work of promoting the interests of owner-managed firms. In these times of change, it is more important than ever that the boutique asset management industry is given a voice to help shape the debate around the future of financial regulation, as well as advocate the need for a competitive landscape.”
Nick Mottram, newly appointed Chairman of IIMI
“It has been a privilege to serve as IIMI’s Chairman and I would like to thank the rest of the team for their ongoing support during my tenure. I am delighted with the progress we have made, notably the recent launch of IIMI Singapore. Nick has long been a champion of IIMI’s work and I have no doubt that he is the right person to chair the group as it builds on its successes to date.”
Jamie Carter, outgoing Chairman of IIMI
ENDS
Categories
IIMI Launches Singapore Branch
IIMI, the boutique asset management think tank, is pleased to announce that it has launched operations in Singapore in response to demand from asset managers in the region.
There are 11 founding members in IIMI Singapore, which is chaired by Timothy Hay, the CEO of Somerset Capital Management’s Singapore office.
Since its foundation in 2010, IIMI has offered an expert voice in the debate over the future of financial regulation, representing independent, owner-managed firms that are entirely focused on and aligned with the interests of their clients and investors. Today, its European membership is comprised of 46 leading independent asset management firms from the UK, France, Norway and Switzerland, managing approximately £500 billion of clients’ money and employing several thousand people.
Both IIMI branches in Europe and Singapore, along with their combined membership, will work with the Monetary Authority of Singapore (MAS) and the FCA to open up and increase opportunities between the two markets as they share experiences and ideas. This includes supporting MAS efforts to develop the Variable Capital Company (VCC) fund structure, on which IIMI will hold a meeting next month with London members and a delegation from MAS.
We are very proud of what IIMI has achieved over the last nine years in promoting the values and interests of boutique asset managers, and we feel the time is now right to expand our geographical presence. Singapore has one of the most thriving asset management communities in the East and we look forward to working with the new IIMI team there as we maintain an open dialogue with both the MAS and FCA for the benefit of our expanding membership.
IIMI Chairman Jamie Carter
IIMI has established itself as a respected voice in the asset management industry and we look forward to leveraging its experience and learnings for our new IIMI Singapore members. Owner-managed, client-centric firms play a key role in preserving the stability and long-term focus of the financial sector and we are pleased to support the important work of independent asset managers in Singapore and the surrounding region.
IIMI Singapore’s Chairman Tim Hay
ENDS