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Openwork adds veteran fund managers to £6bn Omnis

Openwork’s investment arm Omnis Investments has signed up a number of big hitting fund managers as it begins a new strategy of splitting down mandates to expand its fund range.

Openwork adds veteran fund managers to £6bn Omnis

Openwork’s fund arm Omnis Investments has signed up a number of big hitting fund managers as it begins a new strategy of splitting mandates to expand its fund range.

The advice network, which has over 700 wealth advisers, operates on a similar model to St James’s Place whereby Omnis Investments acts as the authorised corporate director (ACD) for funds which are managed on exclusive segregated mandates by third party fund managers.

Omnis is now updating its strategy to split mandates so they focus on specific asset classes or countries for example it is planning on splitting its Asia Pacific fund into an Asia Pacific ex-Japan fund and a Japanese fund. This new strategy will see Veritas Asset Management signed up by Omnis.

  • Citywire AA rated Ezra Sun, head of Asia at Veritas Asset Management, is going to run the new Asia Pacific ex-Japan equity strategy. The new Japanese equity strategy will be managed by new managers Andrew Rose and Masaki Taketsume for Schroders;
  • at the moment Baillie Gifford is the investment manager for the Omnis Asia Pacific Equity fund but when asked, a spokesman for the firm would not say if Baillie Gifford is being dropped from this mandate;
  • the Omnis UK Equity fund (with £1 billion of assets) is splitting in to one strategy focused on smaller companies, run by Franklin Templeton’s Colin Morton and another investing in all UK firms, run by Citywire + rated Richard Bullas. Both will be managed by Franklin Templeton which came on board as a replacement for Schroders earlier this month;
  • the fixed income fund will be split into a sterling corporate bond strategy, run by Citywire + rated Alasdair Ross and a UK gilt strategy managed by Dave Chappell - both managers are at Columbia Threadneedle

These new funds have not been approved by the regulator yet (so they are only described as strategies at the minute) and are expected to be launched in the third quarter of 2018.

Toni Meadows (pictured), chief investment officer at Omnis, told New Model Adviser® the new updated approach will add more asset coverage options for portfolios.

‘This is about coverage of asset classes, styles of manager and it creates capacity within the range and sets up future growth of the service,’ he said. ‘Openwork went through £7 billion the other day on platform and quite a lot of that (£6 billion) goes through Omnis. The managed portfolio service I run, which is a discretionary service, is now through £1 billion in one year and the advisory service is over £4.5 billion.’

Meadows said there will be further fund launches through 2019.

He added Openwork’s strategy is to use its vast distribution network to ensure these mandates have ‘access to the best managers’ and negotiates rates which are not more expensive than the best institutional charges in the market.

What will these new managers offer? Nisha Long, Citywire’s head of cross border investment research

Managers selected are all seasoned investors with a wealth of experience in their respective fields.

Ezra Sun has secured a Citywire rating since October 2017 which is testament to his great long term performance in Asian pacific ex-Japan equities. He has over 20 years of experience of managing funds in the region with stellar returns. Over the past five years alone Sun has generated returns of 76.5%, in sterling terms, on the Veritas Asian fund. This choice of manager by Omnis should play out handsomely.

Andrew Rose has managed funds in the Japanese equity space for almost four decades. His current strategy, the Schroder Tokyo fund, has an unconstrained approach and style agnostic which can add more risk to his portfolio. Having said that, he is comfortably ahead of the average manager in the Equity – Japan sector over a three year period to the end of June with excess returns of 5% in sterling terms.

What surprises me about this choice of manager is that behind the scenes there is succession planning going on. His current co-manager Masaki Taketsume was brought into his team in August 2017 and is a key player in Rose’s succession. He is learning the ropes and may end up being lead manager of the Omnis fund in due course.

Citywire + rated Richard Bullas is a sound choice but he is not as experienced as managers Sun and Rose. He has felt the wrath of Brexit negotiations which has seen his current small cap strategy, Franklin UK Smaller Companies fund, hit with underperformance due to his positions in UK domestic stocks. Over the year period to the end of June he has returned 13.1% in the Equity UK Smaller Companies sector just marginally under the average manager returns of 13.5%. However, this can be seen as a blip as he has an otherwise great track record. He has received a Citywire rating for his three year risk-adjusted returns for 41 out of the 43 months he has been eligible for the analysis.

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Richard Bullas
Richard Bullas
78/165 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 20.91%
Colin Morton
Colin Morton
89/165 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 19.83%
Dave Chappell
Dave Chappell
23/88 in Bonds - Global (Performance over 3 years) Average Total Return: 15.37%
Alasdair Ross
Alasdair Ross
3/19 in Bonds - Euro Corporates (Performance over 3 years) Average Total Return: 23.91%
Andrew Rose
Andrew Rose
56/95 in Equity - Japan (Performance over 3 years) Average Total Return: 32.26%
Ezra Sun
Ezra Sun
31/151 in Equity - Asia Pacific Excluding Japan (Performance over 3 years) Average Total Return: 57.79%
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