Tatton AM growth plans reveal 'great appetite' for multi asset, OEICs and passive acquisitions
Making big waves in the multi manager space
Tatton Asset Management is eyeing opportunities from rival providers exiting the market, with the firm looking to purchase multi asset, passive and OEIC ranges from other houses in efforts to bolster asset growth.
The firm told investors in its annual results published earlier this month that it was targeting "several" potential opportunities as part of ambitions to become a "true asset manager" through organic growth and M&A activity.
Speaking to Investment Week, CEO Paul Hogarth said that while Tatton is a "market leader in DFM MPS", the firm is aspiring to become a player in the multi asset and multi manager space, along with "running our own extensive range".
He explained: "If we could get a book or a range of OEICs from another provider who wanted to exit that would boost our FUM then I would be very happy to look at multi asset, multi manager books."
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Hogarth revealed that Tatton AM had already had "a particular opportunity that came our way" with regard to buying the book of another provider that would have achieved the goal of running multi asset, multi manager OEICs for adviser platforms but chose not to owing to the expense.
He added: "We know what we would want to buy, but we would want to buy the right price."
With regard to product type, Hogarth said "the range that would be the most of interest" would be passive or passive-blend products, owing to the "growing requirement" from investors.
He added that the recent market volatility and business disruption owing to the coronavirus pandemic is likely to encourage more providers to want to sell their ranges.
Hogarth said: "There will be opportunities. I am sure there will be lots of discussions in boardrooms over the next few weeks and months as to what the business focus should be.
"We have a great appetite for what we are doing and I want to really show our enthusiasm for the sector and how hungry we are to move forward."
'Sweet spot' for IFA pressure
Another key aspect of Tatton's growth plan is growing the number of partnerships it has with IFA firms, having reached 595 partner firms over the past year. According to its results, it remains the largest DFM MPS player available on platform.
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He added that the ongoing health and economic crisis is likely to increase pressure on IFA firms as fewer are capable of continuing to offer their own in-house investment capabilities, thereby offering opportunities to Tatton through outsourcing.
Hogarth said: "It is yet another nail in the coffin for IFAs continuing to offer their own investment management capability.
"There have been three main headwinds of late that have not helped; they have had the demise of Woodford IM, the suspension of the property funds because of illiquidity, and now the market correction.
"So the stars are aligning for them to realise 'we are good financial planners, we are good cash flow managers, but should we be managing these portfolios as well?'
"We are in a sweet spot for when firms decide to outsource and choose a partner to do it with."
