“The main focus has been to rapidly get the investment process in place. Part of my remit is to raise third-party assets from institutional and retail clients; the other half is to manage existing assets. With the company having around £86bn in assets, I oversee about £65bn of that in the life funds and unit-linked pension funds. To put that into perspective, I was overseeing £10bn at Fidelity.
“I am responsible for the tactical asset allocation, under which all this money sits. It is akin to moving a supertanker around, so I have to allow for that in the investment process. We now have the important quantitative models built,” he adds.
Greetham says a hallmark of his work at Royal London will be proactive communication, both with advisers and investors.
“I want advisers whose clients may own one of our funds to know what we think about the world and why, and they can then pass that on to investors. We do not want people to feel that what we do takes place in some kind of black box.
“If you say why you do everything you may be making the right decision, but investors see it as being for the wrong reasons. It is important to take people with you, though, to have your investors understand why you are doing things and buying into the process.”
Time sensitive
A big part of that is what Greetham calls “the investment clock”. This is effectively a refinement and expansion on the traditional concept of the economic cycle.
“The term cycle implies that things always happen in the same straightforward way but, with the clock, you can move backwards and diagonally to chart growth versus inflation and identify which asset classes you should invest in.
“There is almost never what you could call a ‘normal cycle’ because events happen to change things: oil shocks or wars in the Middle East, for example,” Greetham says.
The investment clock has four stages, with four different types of preferred investment. “What we try to do is identify where we are in both the growth cycle and the inflation cycle, and then the clock tells you what you should be investing in.”
Right now, the investment clock and the various other aspects of the investment process Greetham has in place, such as close collaboration with his economist colleague Ian Kernohan, for example, has resulted in just one neutral position – property.
