In the latest in our series, Portfolio Adviser hears from Assetco head of distribution Gary Collins (pictured right)
Which particular asset classes and strategies do you anticipate your intermediary clients focusing on over the second half of the year and into 2022?
The appetite for ESG and thematic investing will continue at pace – and we are seeing a strong demand for this through the recent acquisition we made. With its funds in the sustainable food arena and also environmental impact, Rize ETF is gaining strong traction across the UK and European markets, and hopefully through Asia, as we roll these out.
Given the low interest rate backdrop, the requirement for income will not abate. Fixed income and cash offer next-to-nothing returns so clients are looking to equities and alternative asset classes for income. In many respects, there will not be a huge change in this dynamic. Income generation continues to be a focus for investors and, given its equity income strategies, this is one of the areas where Saracen Fund Managers can assist.
Should end-investors – and, by association, asset managers – be thinking beyond equity and bond investments? Towards what sort of areas?
Over time we will see more interest in private markets – for example private equity and infrastructure – reflecting the shift already taking place in large pension funds. Matching liquidity with investment time horizon is often the challenge here. The issue is, what is the most suitable kind of vehicle for investors to access these asset classes? For me, investment trusts work while ETFs are also able to capture some of these more illiquid alternative asset classes.
Given client and regulatory pressure on fees and charges, how is your business delivering value for money to intermediaries and end-clients?
Assetco is in its infancy but a big focus for us will be listening to investors across the asset and wealth space, rather than just presuming we know what they want.
How much of your distribution is currently oriented towards ESG issues and sustainable investing? How do you see this evolving over the next 18 months?
With the recent acquisition of Rize and its new ETF Environmental Impact 100, this investment theme is central to our thoughts. Any future acquisitions made by Assetco will have an ESG element to them either prior to acquisition or as we develop the business.
“One of the few benefits of the last 18 months has been the opportunity for asset managers to take a long, hard look at themselves”
In what ways do you think the experience of the last 18 months has permanently affected or changed the asset management sector?
One of the few benefits of the last 18 months has been the opportunity for asset managers to take a long, hard look at themselves and, for example, change how they engage with clients and how they engage and empathise with their workforce.
I strongly believe we have seen a seismic cultural shift around flexible working, both from a client and employer perspective. We have had a window into each other’s lives through the power of Zoom and Teams and are now used to the interruptions of dogs, children and some interesting art/wallpaper designs in the background. The risk is that, by next year, asset managers revert back to what they used to do. Given those involved in Assetco, however, we will not be one of those managers.
“It is hard to replace the engagement of a face-to-face meeting with a Zoom call – particularly a first pitch”
How do you plan to balance face-to-face and virtual distribution? Have you identified aspects where one is especially better (or worse) than the other?
There is a noticeable split between those who are keen to get back to the office on a flexible basis and those who are happy to continue with virtual meetings. I think it is hard to replace the engagement and effectiveness of a face-to-face meeting with a Zoom call – particularly with a first pitch on a new strategy. We all live such busy lives with so many distractions.
Did you manage a staycation or to get abroad this summer?
We had a couple of holidays that were cancelled, either due to travel restrictions or family members getting Covid. The weather in the UK this summer has been pretty dire but we got lucky on our few days in Cornwall. I feel fortunate. I have a new role with an exciting, disruptive company and we have much work to do. I just hope the family understands!
What aspects of your own lockdown routine do you expect to continue with as people migrate back to office-working?
I quite like the work-life balance and seeing a little more of the family – however, in the time I have sat down to write this, I have been interrupted by the electrician, two teenage children needing lifts to places and the dog constantly barking at passers-by. There are times when I do miss the office!
“What I will not miss is the ‘sea of sameness’ that was lockdown”
More generally, what are you expecting from ‘the new normal’?
What I will not miss is the “sea of sameness” that was lockdown. I really worry about the long-term effects on children’s mental health that will have been suffered over the last year. Will I wear a mask on the tube even when we do not need to anymore? Maybe. Will we ever go back to five days a week of everyone in the office? Unlikely. I do miss the social interaction with clients, colleagues and fund managers, though, and hope that returns soon.
