Cazenove capital management

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Cazenove capital management

  1. 1. Robert Thorpe WE’RE THE VALUE Head of UK Retail YOU CAN ADD Nick Georgiadis Head of IntermediariesCazenove Portfolio Management Service Team For professional advisers only. www.cazenovepms.com
  2. 2. OverviewIn this session we will discuss:• Why outsource?• What to outsource?• Outsourcing options• Due diligence• Our solutions -2-
  3. 3. WHY OUTSOURCE?Key considerations when managing a client’s wealth
  4. 4. Managing a client’s wealth Asset Investment allocation selection Transaction Monitoring Suitability -4-
  5. 5. Asset allocation • Volatility levels at historical highs • Rise in cross asset class correlations • Increased impact of global political fiscal policy on asset prices Vix Index 90 80 70 60 50 40 30 20 10 0 2007 2008 2009 2010 2011 2012 Source: Bloomberg, 31/08/07 to 31/08/2012 -5-
  6. 6. Active vs Passive: no argument with quality research! Cazenove UK Opportunities Fund performance over five years 60 50 40 30 20 % growth 10 0 -10 -20 -30 -40 -50 Cazenove UK Opportunities Fund FTSE All-Share TR Index Source: Lipper, B Acc, net income reinvested at 31/08/12 -6-
  7. 7. Right manager, right time – Woodford vs Buxton Performance of Invesco Perpetual Income Fund relative to Schroder UK Alpha Plus 40 30 20 10 % growth 0 -10 -20 -30 -40 -44.3 -50 Invesco Perpetual Income Inc Relative to Schroder UK Alpha Plus A Inc Source: Lipper, 94 months from 28/06/02 to 30/04/10 -7-
  8. 8. Transaction, speed and cost/value perception Automated pros: • Timing - useful for short-term tactical trades • Re-balancing for client Automated cons: • Clients may not see advisers role in transactions • Adviser removed from process (positive or negative?) • Time and cost it takes to make changes… (however…..£50m in DFM models, cost of DFM 25bps + VAT =£150,000) -8-
  9. 9. Monitoring • Monitoring and managing portfolio • Reacting or not to any change in sentiment to trigger an investment change or change in asset allocation • On-going client suitability -9-
  10. 10. Suitability Source: FSA, www.fsa.gov.uk - 10 -
  11. 11. Due diligence Source: FSA, www.fsa.gov.uk - 11 -
  12. 12. Help with due diligence Cazenove Capital guide to be produced shortly….in the meantime: Available free • Generic overview of available services: Defaqto - a guide to discretionary fund management: www.defaqto.com • DFM performance review available free: Asset Risk Consultants – Suggestus Services: www.suggestus.co.uk
  13. 13. FSA – Assessing suitability – Guidance – July 2012 Source: FSA, www.fsa.gov.uk - 13 -
  14. 14. CAZENOVE CAPITAL AS YOUR INVESTMENT PARTNER
  15. 15. Cazenove Portfolio Management Service• One service with two propositions• Same journey, but a different route• Over £2bn invested in service by advisers• Low annual charge . *0.5% AMC on Class X shares, minimum £1m waived via adviser platform. **1% AMC (plus VAT) up to £1m, scaling down to 0.5% on any balance thereafter. More information on fees is available on request. - 15 -
  16. 16. Range across the risk spectrum Source: Distribution Technology. The fund risk profiles are accurate as at 30/06/2012 - 16 -
  17. 17. Our fund performance Cazenove MM Diversity Fund relative to IMA Mixed Investment 20-60% Shares* 30 25 20% growth 15 10 5 0 -5 09/05 09/06 09/07 09/08 09/09 09/10 09/11 Cazenove Multi-Manager Diversity Fund IMA Mixed Investment 20-60% Shares Sector • Top decile returns of 47.0% since restyle* • Bottom decile volatility of 53 competitor funds since restyle* • Ranked 2nd for Information Ratio – a measure of risk-adjusted returns* *Source: Lipper Hindsight, gross income reinvested 01/09/05 to 31/08/2012 The fund restyled to a multi-asset approach on 01/09/05 - 17 -
  18. 18. Our discretionary fund management Source: Asset Risk Consultants PCI (ARC) www.assetrisk.com at 31/03/12. - 18 -
  19. 19. Why advisers select Cazenove Capital for DFMIndependenceSpecialist intermediaries teamTailored portfolio management serviceStrong risk-adjusted performanceGenuine expertise in specialist areas of investmentCentral investment process – consistency!Established trust in the adviser community - 19 -
  20. 20. Working with advisers• Initial proposal• Regular communication – email, phone or meetings• Quarterly or six-monthly full performance valuations• Online valuations facility• Dedicated portfolio manager and support team• Formal meetings with you and your client - 20 -
  21. 21. Wealth management central investment process Equities and fixed Economics and Technical Fund selection Earnings/ Fundincome specialists Investment Risk analysis team valuation overview flows Chris Richard Nick Robin Marcus Robin External research Rice Jeffrey Bucknell Griffiths Brookes McDonald Steve Investment committee Cordell Julie Dean Portfolio manager Paul Marriage Peter Adviser Client Harvey - 21 -
  22. 22. Starting points Three optimal asset allocations • Defensive • Intermediate • Progressive Asset allocations based on June 2012 - 22 -
  23. 23. Building client portfolios• Starting point for portfolios• Tailored to clients requirements• Rigorous investment process - 23 -
  24. 24. SUPPORTING YOU
  25. 25. Supporting you• National sales team to help understand and model our support to suit your business• Regional team of portfolio managers• Fee facilitation for DFM business• Working only with advisers• Online tools and enhanced reporting services• Depth of marketing expertise, to provide content and materials specific to your requirements• Award winning proposition that is proven over many years, in different market environments• Cost effectiveFurther details are available at www.cazenovepms.com - 25 -
  26. 26. APPENDIX
  27. 27. Perception of adviser Trusted Expertise Comprehensive Identify goals Retirement fund Reduction Risk mitigation Schools fees IHT/trusts Navigate market place Income Deliver return goals Relationship/Client Adviser Tax planning Keyman Risk management value Wealth management Portfolio risk Periodic reviews Monitoring Product suitability Changes to circumstances Consultancy Legislation changes Adjust plan Capital gains Individual events/opportunities - 27 -
  28. 28. Demonstrating adviser valueExample for use of DFM:• Establishing suitability• Initial due diligence of market place and selection• Providing access to selective DFMs• Regular on-going review of the clients circumstances and goals• On-going review of portfolio management and performance set against goals• Continuing audit of DFM, business, personnel and service levels• Audit of DFM client specific reporting• Regular contact with client, providing communications of portfolio performance, market and industry views and recommendations of changes necessary
  29. 29. Regulatory information and risk warningsIssued by Cazenove Capital Management (Cazenove Capital). It is for information purposes only and does not constitute anoffer to enter into any contract/agreement nor a solicitation to buy or sell any investment or to provide any services referredto therein.The information provided (including the Dynamic Planner® and risk profiles) is to assist financial advisers when establishingtheir clients’ attitude to risk. The responsibility for assessing the suitability of financial products remains solely with thefinancial adviser. The provision of this information should not be construed or interpreted that either Cazenove Capital orDistribution Technology are providing financial advice.This document is solely for the use of professional intermediaries and is not for general public distribution.The contents of this document are based upon sources of information believed to be reliable, however, save to the extentrequired by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to itsaccuracy or completeness, and Cazenove Capital or connected companies, directors, officers and employees do not acceptany liability or responsibility in respect of the information or any recommendations expressed herein which, moreover, aresubject to change without notice.This document has been produced based on Cazenove Capital Management’s research and analysis and represents ourhouse view. Unless otherwise stated all views are those of Cazenove Capital Management. It may not be reproduced in anyform without the express permission of Cazenove Capital Management and to the extent that it is passed on, care must betaken to ensure this is in the form which accurately reflects the information given here. Unless otherwise indicated, thesource for all data is Cazenove Capital.Past performance is not a guide to future performance. The value of investments and the income from them can go down aswell as up and an investor may not get back the amount originally invested and may be affected by fluctuations in marketsand exchange rates.Cazenove Capital Management is the name under which Cazenove Capital Management Limited (registered No.3017060) and Cazenove Investment Fund Management Limited (registered No. 2134680) each authorised and regulated bythe Financial Services Authority and of 12 Moorgate London EC2R 6DA provide investment products and services. - 29 -

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