Who’s who in London-listed asset & wealth management
An overview of runners and riders covered by TheInvestors.blog and what to expect from this newsletter
TheInvestors.blog aims to provide nuggets of market and company analysis for shareholders of stock-exchange-listed companies in the asset and wealth management sectors. It should also be a useful read for directors, executives, and managers of these companies - offering insights into how investors are thinking about them and their peers.
Over the last few years, the universe of London-listed companies in this space has changed a lot. There has been a spate of de-listings as a result of mergers, acquisitions, and take-private deals. The last two IPOs were back in 2021 (Foresight and PensionBee), with the readmission of AssetCo to AIM also in 2021. And it’s now looking likely that two more companies will exit public markets shortly: Mattioli Woods and Hargreaves Lansdown - with both companies’ boards accepting acquisition offers to take them private (see below).
So, it’s a good time to step back and clarify to readers of this newsletter which companies will be written about. This is done by means of a market map (graphic below), and a brief description of each company in this universe. Hopefully these will be useful pieces of information in their own right too. Subscribers can expect deeper dives into individual companies and market conditions in future posts.
TheInvestors.blog is not investment advice. Please read the disclaimer here.
Which companies are written about?
There are two main groups of companies covered in this newsletter:
Asset managers (left hand column in graphic below): These run investment funds which would typically make up only a part of an investor’s portfolio. Funds often have some sort of specialisation such as investing in a particular industry sector, asset class, or geography. Funds can certainly grow rapidly and benefit from ‘hot asset classes’ (think private assets over the last few years). But fund assets tend to be less sticky than those managed by wealth managers. Think about a scenario when an investor wants to exit an investment placed with an asset manager. They would be likely to move those assets to another asset manager or into cash.
Wealth managers (right hand column in graphic below): These tend to house all or a large part of an investors’ portfolio (often spread across a range of investments such as individual equities or asset managers’ investment funds). The invested assets may or may not be coupled with investment advice. Assets tend to be stickier than those of asset managers. Think about a scenario when an investor wants to exit an investment or asset class, they will probably execute this switch without moving assets from their wealth manager. It is simply a case of switching from one financial product to another. This newsletter also includes platforms (such as Hargreaves Lansdown, AJ Bell, IntegraFin) and discretionary fund managers or DFMs (such as Tatton Asset Management, Brooks Macdonald) in the wealth management segment, as they tend to manage or administer portfolios for investors.
There are also companies which run both asset and wealth management operations (centre column in graphic below).
Who does what?
The big beasts (with asset and wealth management operations)
Schroders: Multinational asset manager with diverse offering serving a range of institutional and private investors. Public and private markets investment capabilities. It also has a significant advisory business (e.g. investment and advisory services to corporate pension schemes, insurance companies etc). Asset management AUM is £639bn (83% of AUM). It has a smaller but still significant wealth management arm (Cazenove Capital, Benchmark, Schroders Personal Wealth) with £135bn AUM (17% of total). [AUM figures include JVs and associates.]
Abrdn: Three segments: Investments - multinational asset management business with a range of funds, investment solutions and investment trusts (£369bn, 73% of AUM); Adviser - UK’s 2nd largest adviser platform (£75bn, 15% of AUM); Interactive Investor - the UK’s 2nd largest D2C investment platform with £73bn AUM (14% of AUM). Currently conducting a new CEO search with Jason Windsor (previously CFO) in an acting CEO role.
Asset management segment
Man Group: Invests in equities, credit and multi-assets across public and private markets. Quant-focused strategies as well as fundamental, research driven strategies. 45% of AUM sourced from EMEA, 35% Americas, 20% Asia.
Ninety One: Teams covering equities, fixed income, and multi-asset. Origins in South Africa, where it still has substantial operations and is listed on the Johannesburg Stock Exchange (in addition to its London-listing). Now a global operation with 41% of AUM sourced from clients in Africa, 31% UK & Europe, 16% APAC and 12% Americas. See previous posts here:
ICG [Intermediate Capital Group]: Private markets specialist with private equity (mid and upper-mid market), credit, and real assets strategies. Operates globally across EMEA, America, APAC, UK & Ireland.
Jupiter: Active manager with equities, fixed income and multi-manager strategies. Primarily UK (65% of AUM) and EMEA (22%) client base. 83% of AUM from retail, wholesale and investment trust channels, 17% from institutional investors. A key strategy is to increase proportion of institutional AUM. See previous post here:
Ashmore: Specialist emerging markets active manager focused primarily on fixed income strategies (85% of AUM) with equities making up 12% of AUM. Heavy outflows over the last few years as EM fixed income strategies have been out of favour with investors.
Impax: Specialist is sustainable investing. Mostly listed equities strategies but also offers fixed income, systematic, and private markets strategies. Clients mainly institutional investors. 46% of AUM sourced from EMEA, 22% UK, 27% North America, 4% APAC. Read latest Equity Development research notes here.
Liontrust: Active manager with equities (74% of AUM) and especially UK-equities bias (37% of AUM). UK retail investors dominate client base (86% of AUM in UK retail funds and MPS). Largest investment strategies are Sustainable Investment (37% of AUM) and Economic Advantage (23%).
Polar Capital: ‘Multi-boutique’ with 13 investment teams managing specialist portfolios with a thematic, sector, geographic, or financial instrument focus. Technology, healthcare and insurance are largest strategies. Targets mostly institutional investors with client base primarily in UK (60%) and across Europe ex-UK (31%). Read latest Equity Development research notes here.
Foresight: Specialist investor in infrastructure/real assets (81% of AUM), private equity (13% of AUM) and listed equities (6% of AUM), mostly with a sustainability theme e.g. energy transition.
Premier Miton: Manages a range of equity strategies (51% of AUM: 21% of total AUM in UK equities, 31% in non-UK), multi-asset (31%), fixed income (13%) as well as having some segregated mandate and investment trust business. Majority of income comes from retail investment funds.
CLIG: City of London Investment Group invests primarily in closed-end funds (equity, fixed income and alternatives). It’s London-based business has an institutional investor focus and a significant emerging markets investment focus (36% of AUM). It also has a US business (38% of AUM) which primarily has a HNW individual client base.
Pollen Street: Private markets specialist (equity: 62% of AUM; credit: 38% of AUM). AUM mainly sourced from investors in UK and Europe (63%) and the USA (29%). It’s £4.2bn of AUM includes £0.8bn of on-balance-sheet investments. Sector focus in payments, wealth, insurance, tech-enabled services, and lending.
AssetCo: Focussed on acquiring asset and wealth management businesses. Asset management businesses mostly consolidated into operating arm ‘River Global Investors’. Has announced intention to re-brand to ‘River Global plc’ and to conduct a share split to enable a spin-off of its stake in wealth management platform Parmenion.
Mercia: Venture capital, debt and private equity to mostly regional (ex-London) UK businesses, investing between £100k and £20m. It manages c£1.6bn of funds for third parties and invests alongside them with c£117m of on balance sheet investments. It intends to increase focus on third party fund management. See previous post:
Wealth management segment:
St James’s Place: Advice-led wealth manager with ‘partner’ adviser model (tied to SJP). AUM primarily in mass-affluent space (78% of AUM in £100k-£2m range). Ambitions to push further in HNW space (£2m-£10m). Shake-up underway following heavy criticism of previous fee structure. Revised fee structure announced along with cost cutting programme under (relatively) new CEO Mark Fitzpatrick (appointed Oct 23).
Hargreaves Lansdown: Largest D2C investment platform in the UK. Board has recommended acceptance of acquisition offer which will result in a de-listing (deal still subject to approvals). See previous post:
Quilter: Advice-led wealth manager in 1) Affluent segment with £50k-£250k to invest (73% of AUM: sourced via restricted/tied advisers and third-party IFAs using Quilter platform) and 2) HNW segment with >£250k to invest (26% of AUM: sourced via restricted/tied advisers and IFAs). Also runs investment solutions (discretionary fund management and portfolio services).
AJ Bell: Adviser platform and D2C platform (61% and 32% of AUA respectively). Adviser platform is 4th largest in UK after Quilter, Abrdn, and Transact. D2C platform also 4th largest after HL, Interactive Investor and Fidelity. Also has non-platform AJ Bell Investments business making up 6% of AUA. See previous post:
IntegraFin: Holding company of adviser platform Transact (technology and investment platform), which is the 3rd largest adviser platform in the UK (after Quilter and Abrdn).
Tatton: Serves smaller, UK-based Independent Financial Advisers via two business units: Tatton Investment Management - discretionary fund management (c84% of group revenue), and Paradigm - regulatory and compliance consulting and outsourcing, plus mortgage and protection insurance aggregation (c16% of group revenue). Read latest Equity Development research notes here.
Brooks Macdonald: Provides investment management services for financial advisers and private clients in the UK, and to international clients via its operations in Jersey, Guernsey, and Isle of Man. International business currently ‘under strategic review’. Andrea Montague (current CFO) to take over CEO role from 1 October 2024.
Mattioli Woods: Financial advice, administration, and investment management services to mass affluent and high-net-worth private clients, and employee benefits services to corporate clients. In the asset management space, owns Maven Capital Partners and 49% of Amati Global Investors. MW board has accepted an acquisition offer which is expected to become effective 3 September 2024.
PensionBee: High-growth, earlier-stage business, IPO’d in 2021. D2C model giving customers the ability to switch and consolidate ‘legacy’ pension pots (typically from previous jobs). Focus on UK market to date but recently launched in US also.
What to expect from this newsletter
Future posts will include commentary on the most important issues for shareholders:
individual company financial results;
quarterly, half-yearly, and annual comparisons of assets-under-management movements to tease out who’s winning and who’s losing;
macro-trends of where capital is moving from and to, and which asset managers benefit or lose from these trends;
strategic sector analysis; and
thoughts on opportunities and threats.
Lastly, I’m always open to suggestions and feedback - what you liked, what you didn’t like, what you’d like to see in future posts.
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Disclosure: At the time of writing, Paul Bryant was a shareholder in a number of the companies mentioned in this publication, and covered Impax Asset Management, Polar Capital, Mercia Asset Management, Tatton Asset Management, and Mattioli Woods as an analyst on behalf of Equity Development Limited. Read Equity Development’s research on these companies by clicking on each. And please read this link for the terms and conditions of reading Equity Development’s research.
Hi Paul, great primer, thanks! In the main infographic you have AUM/AUA (£m) suppose it should be in billions? Thanks