JO Hambro Capital Management’s (JOHCM) chief executive says it would take a bold man to claim he has made a great impact just one year into the job.
Ken Lambden (pictured) is referring to the record level of inflows the company attracted in his first year as CEO: some £3.6 billion that raised the firm’s assets under management (AUM) to £30.4 billion as at 30 September.
‘What I have done is try to look at the business fresh and find different ways to do things,’ he said. That has involved keeping an eye on capacity limits and ensuring the firm’s products stay relevant.
‘After a period of sustained growth, it makes sense to look at what different pressures this puts on the business,’ he said.
In the past year, the firm has added to its legal compliance team to ensure it will be Mifid-ready, something Lambden says has occupied most of his time.
In preparation, the firm has announced that it will absorb research costs which will cost it around £5 million, according to the annual report published by its Australian parent company BT Investment Management.
Regulation aside, Lambden notes that one of the biggest enemies of strong active returns is the lack of attention fund managers pay to capacity.
‘We define our capacity aggressively across our product range and where our AUM starts to approach it we soft close and we are prepared to hard close. We like performance fees because they let managers earn from a smaller asset base.’
With growth still firmly on his mind, the launch of new products will become inevitable when the existing funds start reaching capacity, he said.
In August the firm hired a New York-based multi-asset team headed by Giorgio Caputo.
Although the fund, due to be launched in December, will follow a global income strategy resting heavily on equities, it will also be JOHCM’s first ever product investing in fixed income.
‘If we had found another team this year that we thought was of the sufficient standard and was not replicating products we would have brought them in as well,’ Lambden said.
Elsewhere, the UK and US sales teams have also been strengthened and the firm is thinking of opening a Europe office if passporting rights in the UK are impacted as a result of Brexit.
However, not all is rosy at the company. According the BTIM annual report, JOHCM is being investigated in relation to the ‘eligibility of certain services’ approximating AUS$8.6 million (£5 million) paid for out of dealing commissions.
While this relates to dealings before Lambden became CEO, between 2006-2016, he stated that the company is working with the FCA to ensure this is resolved quickly.