What is your brief?
I joined SEI a year ago. The brief was to look at the strategy for both the UK and European distribution, review it, and try and take the SEI proposition forward as much as possible. I’ve adapted it quite a lot in recent months, but particularly looking at the European piece, which over the years SEI has dipped its toe in and out of.
The fact that we have a Dublin-listed range of funds and the success that we’ve had in the UK – where we’ve raised about £1bn in three years – means that there is absolutely no reason why that same success cannot be achieved in continental Europe.
In the past six months I have expanded the remit of what the guys are doing here in the UK, as there is no reason why we should not be even more successful than we have been. In Europe, I hired Simon Pinner as sales director, who is a fluent German and French speaker, predominantly to look at Germany and Switzerland, and Harriet Parker who was already in situ and she is a fluent Italian and French speaker.
So we are currently concentrating on Germany, Italy and Switzerland, softly softly, because we don’t have offices out in those countries but we are exploring opportunities. The way we tend to work at SEI, which I absolutely agree with, is to explore opportunities first rather than spend a fortune setting up an office in Geneva today when we don’t have any guaranteed business coming in. There is no doubt in my mind that we will have success out there. Once we do, we can explore setting up an office out there.
Why have you done so well in the UK?
There are two key parts to SEI – the platform part and the asset management part. Among the companies who have been successful in helping us to generate £1bn is True Potential, the big national IFA consolidator. We do a number of its back office platform functions and we also do the asset management.
The SEI proposition has often been combined with both platform and asset management which works very well, particularly for national IFA firms where 90% plus of the £1bn business has come from.
How does SEI build its client base?
In the States, SEI started offering back office IT solutions to big global banks that were American-based back in the ’70s and early ’80s particularly. Even to this day, out of the 10 biggest global banks in the States, SEI probably has a relationship with at least five or six of them who are utilising our services.
SEI has historically, and to some extent today, tended to support strategic partners, so our brand is not that well known because its white labelled and not in our name. One of our peers, Russell Investment Group, has a much bigger brand than we do.
For our biggest client globally on the asset management side, SEI runs five strategies, from very defensive to very aggressive. These are very similar to the Dublin funds offering and to what we discuss with other big distributors. We are a manager of managers – they will use our manager picks and they have a key say in the asset allocation.
We have 110 people, often CFA qualified, going out and sourcing names that other people couldn’t source. Most of the fund of fund companies in the UK have seven to 10 people picking managers and funds. By that definition, we are able to find and source people that others can’t.
That for me is clearly the big differentiator. With RDR in the UK and regulations in Europe over the next 18 months to two years, what we are able to say is that a lot of the houses in the UK and Europe are picking the same funds. That’s all well and good but when advisers are being scrutinised about what they are doing for their fee, we would say by using a company like SEI we are able to give clients access to managers that you would not be able to get access to in any other way.
I had a meeting with someone from Germany looking at investing family office money, who played devil’s advocate saying he could get access into fund management groups like Schroders without needing SEI. I said that may be true but you can’t necessarily get access to the fund managers that we have. For example, a fund group may have a particular manager who only runs long/short money, but for SEI he specifically runs a long-only mandate because our research people identified him as someone we wanted to give a European mandate to on a long-only basis.
What is your presence in Europe as far as the IFA market is concerned?
The Federation of European Independent Financial Advisers (FEIFA) is a new relationship for us which we set up a few months ago and that is to do with IFA market in Europe.
I have to say the main strategy for continental Europe is less about the IFA market and much more about the banks and family offices. No disrespect to the IFA market but I’ve only got so many people. I wish I had more. If I had 50 sales guys then I would be only too delighted.
So our input into the IFA community is very much through FEIFA because having met with chief executive Paul Stanfield on a number of occasions through another one of our new hires Kevin Bull, strategic alliance development director, I liked him and what he had to say – he talked a lot of sense.
Which countries are exciting you the most at the moment?
At the moment we are closest to Italy. Is that because I suddenly think Italy is better than Switerland and Germany? No. What I was able to do in Italy was find someone who has been helping us on a consultancy basis to identify the right individuals at the right banks and the right family offices.
We have been able to have more meetings at a speedier pace than we would otherwise have done. I am expecting us to create our relationships quickly over the next few months in Milan. But I’m also making very good progress in Zurich and Geneva.
Have you ruled out any countries?
No, not at all. I did a Marcus Evans global event in Montreux two months ago – The Elite Summit – which has a number of delegates from private banks and family offices. Myself and Simon Pinner, who works with me, had 35 back-to-back meetings in two days. But much as I would love to say I want exposure in Spain I’ve got three people at the moment including myself and I’ve got UK matters to look at and sales teams to run. As it happens, our marketing director Lucy Tazzyman speaks fluent Spanish so there may be opportunities. But as it stands I’ve got to be firm and I’ve got to stay focused.
What progress have you made in talking to life companies and banking platforms in Europe?
We’ve had conversations with Fondsbank, the equivalent of Funds Network out in Germany and I was talking to UBS in Zurich on their platform side. UBS, for instance controls 80% to 90% of the Swiss market as a platform so we are engaging with people like that. Kevin is working with the Cofunds of this world in the UK and also he is targeting the life company side. We have worked with Cofunds very closely over the years but we are also engaging with Skandia, talking to them on the platform side as well.
We have had relationships historically with these platforms but I wanted to make sure it was on firmer ground, and by having someone like Kevin on board we’ve been able to do so.
Looking ahead, what are your priorities?
This isn’t rocket science. It’s about identifying the right clients and making sure you generate the right activity for those clients. Prior to my joining I felt the list of clients that we were dealing with was too narrow.
I’ve expanded that list out – these are the big national distributors in the UK – and within my team I have now allocated them to make sure those conversations are going on, and some of them are moving along very nicely.
We have identified the key players in the three countries in Europe I’ve talked about and we are having conversations with them. That strategy will continue and when we create the next deal, and let’s say we do line up Milan, then I will potentially put more people in to back up that strategy.
