Liontrust chief executive John Ions is welcoming additional scrutiny on the firm following its ascension to the FTSE 250 index as it remains open to further acquisition opportunities.
The £696m asset manager joined the list of the UK’s top 250 companies by market capitalisation after FTSE Russell’s quarterly review of the index on 3 June, although the changes are not actually effective until trading starts on 22 June.
Speaking to Portfolio Adviser, Ions said the move provided a “fantastic foundation” for the company’s next phase and he welcomed the extra pressure that came with it, saying he believed it would actually aid performance.
He said: “The more scrutiny we’re under from our point of view, the better. It just means that we continue to raise the bar and push things forward. Obviously, we’re a bit more in the spotlight now but we’ve always tried to adopt the highest possible standards.
“We welcome that extra scrutiny because if you want to be successful, you’ve got to have the highest standards applied to your business internally – good quality businesses are the ones that are successful.”
Ions said the ambition within Liontrust was as high now as it has been over the last 10 years despite the move to remote working in recent months due to the Covid-19 pandemic.
Advisers and investors want security in the firms they trust
He also thinks becoming a FTSE 250 company gives clients and investors confidence that Liontrust is a secure company to back financially.
“If you’re an adviser advising people to put money with Liontrust or an investor who’s putting money into Liontrust, you want to know that business has been successful, is big enough and has that security with it. So, I think there’s a great opportunity to continue doing what we’re doing in terms of broadening our client base and delivery.
“Clients have entrusted us with the money, they should share that level of success with us.”
But he said while being a FTSE 250 firm meant added pressure and a broader group of potential shareholders to court, the firm did not need to change anything from a business perspective.
“I can’t tell you what markets are going to do, I can’t tell you what fund flows are going to do, but our goal is always to take more market share which is what we’re doing and you can see that from the flows.”
In its latest trading update, the firm reported net inflows of £492m in Q1 2020 and £2.7bn for the year ended 31 March 2020, an increase of 52% compared to the year before. Assets under management and advice stood at £16.1bn at the end of the quarter, an increase of 27% over the year.
Acquisitions always in mind but nothing appealing at the moment
Looking ahead, Ions said Liontrust is always on the lookout for new teams or acquisitions to fill up capacity. The firm completed its acquisition of Neptune in October last year which followed the April 2017 acquisition of Alliance Trust Investments. It also poached Kames fixed income duo Phil Milburn and David Roberts in early 2018.
But having “been around for a while” and looked at a lot of companies in the industry, up to four times in some instances, Ions added there was nothing attractive at the moment.
“In times like this prices change but not necessarily the underlying fundamentals of the business, so I wouldn’t say that we’re looking around for opportunities. But we’re always looking for things that are the right business fit, things that we think we can improve.”
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He added: “Buying talent like Neptune that allows us to accelerate the development of a three-year track record and gives us some critical mass, we’ll take a look at those opportunities.”
Liontrust’s plan for remote working
In relation to Liontrust staff returning to the office, Ions said the likelihood is the firm will remain remote working “for some time to come”, especially as staff have adapted so well to the situation.
“I would nearly go as far to say it’s arguable that we’re operating at possibly a higher level of output that we would be if we were all in the office,” he added.
But plans are afoot for a return even if it’s just bringing in certain teams at set times for catch-ups.
“We’ve mapped the office and started to plan it – traffic light systems for toilets and one-way systems and things like that. I think, because the business is working so well, the likelihood is that we that we will be in a remote environment for some time to come.”
It comes as other firms in the industry have started to unveil plans for the future working environment while adhering to social distancing guidelines. Standard Life Aberdeen has told most staff they will stay working from home until 2021 while Allianz Global Investors is staggering the process, starting with 20% of staff returning to its London office on a voluntary basis by mid-June.
“I think the key is through all of that you’ve got to maintain focus because if you start having a situation where those who want to go into the business can and those who don’t want to don’t have to, you start to lose a bit of your edge. But am I surprised other companies have said, ‘We expect to come back in the new year’? No.”
FTSE Russell’s June rebalance also resulted in Avast, GVC Holdings, Homeserve and Kingfisher joining the FTSE 100 while Carnival, Centrica, Easyjet and Meggitt dropped into the FTSE 250.
