City veteran and former Framlington boss Mike Vogel has snapped up a significant stake in derivatives specialist Catley Lakeman, Portfolio Adviser can reveal.
The investments made via funds managed by Elcot Capital Management, the company set up by Vogel and Neil Birrell after they left Framlington in 2003, are to support the next phase of Catley Lakeman’s growth plans.
Launched in 2008, Catley Lakeman provides structured products and securitised investments to wealth managers. Its fund arm Atlantic House Investments and MPS business Albermarle Street Partners have over £1.9bn in assets under management.
Since appointing ex-Blackrock UK retail boss Tony Stenning (pictured) as CEO last year, the firm has been ramping up its expansion plans and looking to broaden its client base.
Speaking to Portfolio Adviser Stenning said Elcot Capital’s backing is a vote of confidence in its long-term strategy to democratise derivatives usage among wealth managers. Stenning would not disclose the size of Elcot Capital Management’s stake but confirmed it is now the majority shareholder.
“These are long term investors, with a very good track record, with lots of industry experience, and they’re enormously supportive of the strategy that we have implemented.”
New majority shareholder does not change the status quo
Vogel is no stranger to scooping up substantial stakes in investment firms. In 2014, Elcot Capital acquired 50.2% of Premier Asset Management from Electra Private Equity. Two years later the firm floated on the London Stock Exchange and in 2019 merged with rival Miton Group.
Vogel, who served as Premier’s chairman from 2007 until December 2020, has maintained close ties with the business, owning a 4.5% stake in his Cayman Islands-domiciled fund, according to RNS filings. His former business partner Birrell is Premier Miton’s CIO.
Despite Catley Lakeman’s new majority shareholder, Stenning stressed the transaction does not change the status quo.
Vogel will join Catley Lakeman’s board as a non-executive director, alongside Elcot CFO and COO Luke Wiseman and chairman Paul Tobias. But the existing management team will remain in place, with founders Tom May and Andrew Lakeman retaining their roles and sizeable stakes in the business.
Remaining founding partner Russell Catley will leave the business, though Stenning notes this is part of an “orchestrated succession plan” that has been in place since he joined last July. Existing non-executive director Richard Lanyon will also depart.
“They’re not doing this to get their name in lights,” Stenning reiterated. “Really, it’s about them just backing the existing management and enabling us to continue to deliver on that longer-term strategy.”
Atlantic House mulling future fund launches
Stenning told Portfolio Adviser the firm has been “making great strides” in implementing its growth strategy and educating wealth managers on how to broaden their usage of derivatives products.
The Atlantic House Total Return fund, which was repositioned after Stenning joined, has more than tripled in size from £15m to over £50m. It now targets a return of cash +4% per annum in most market conditions with half the volatility of equities by using derivative instruments to produce a similar payoff profile to corporate bonds before central banks began implementing quantitative easing.
Atlantic House’s flagship Defined Returns fund aims to deliver an annualised net return of 7-8% over the medium term to long term “in anything but the bleakest of market conditions,” according to its factsheet. The £1.5bn fund acts as an equity proxy, investing primarily in UK government bonds alongside global, liquid derivatives to mirror developed market equity returns in a more predictable way.
Asked whether Atlantic House plans to launch more funds in the future, Stenning said conversations are always ongoing. “We’re always looking at things and developments. But I would expect us to continue to evolve our product ranges in the coming months and years.”
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