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Sunday, April 1, 2007
Time for investment shopping

Old Mutual recently gathered all its various investment services into one business unit to be called Omigsa (Old Mutual Investment Group SA). The outcome is essentially a dozen ‘performance driven’ offerings dubbed ‘boutiques’.

Omigsa chief Thabo Dloti says the new multi-boutique investment business combines the benefits of Old Mutual’s global reach and strong supporting infrastructure with independent, specialist and focused investment businesses. “It marks our transition to a business with 12 nimble and fiercely independent investment businesses, with the one main aim: to deliver great performance to clients.”
Spanning all the key investment styles and asset classes, he says the 12 boutiques offer investors access to a comprehensive range of investment products, including both actively and passively managed funds, as well as conventional and alternative investments. The group encompasses all the investment businesses formerly dispersed throughout the Old Mutual, including Old Mutual Asset Managers, Old Mutual Specialised Finance, Old Mutual Properties, Symmetry and recently acquired Marriott.
In December, the group also acquired a controlling stake in Umbono Fund Managers – an investment business that offers index trackers and other passively managed funds. Mr Dloti says the plan is to build Umbono into the largest index manager in SA. “We have worked closely with Tendai Musikavanhu and his Umbono team since inception.”
Boutique managers have been given the autonomy to take the critical business and investment decisions that drive performance. They decide who to recruit, what products to offer, the fees they will charge and the client mandates and benchmarks around which they will structure their investment process. These are decisions that in large asset managers are typically taken by the executive team.
On the investment side, the boutiques no longer subscribe to a single house view. Each builds its own portfolios, which allows them to invest with conviction as opposed to running with the herd and gives them the critical ability to react quickly to market information. They can also set capacity limits on how much business they are willing to take on, ensuring that they meet their performance promises to clients in the long term.
“With their remuneration largely determined by the performance they deliver, the investment managers only do well when the clients do well, creating a culture conducive to innovation and accountability.”
The boutiques will be supported by Old Mutual’s research teams and their investment analysis.  Peter Linley is head of Investment Research and Steve Minnaar head of equity research. Other teams include economics, quantitative research and credit analysis.
 

Copyright © Insurance Times and Investments® Vol:20.3 1st April, 2007
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