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As a former Gurkhas commander, Tim Warrington is used to dealing with stressful situations.
But the ex-soldier hung up his uniform just a few months ago in 2007 and found himself in a room with pension fund trustees and consultants pitching a £65m investment mandate.
Mr Warrington’s career change came after a meeting with Oge Westbaugh, one of the founders of the Skagen Fund. Westbaugh was looking for someone to lead the company’s expansion into the UK, but didn’t want someone from Square Mile to dictate how things were done.
“I was serving as a military officer in the Asia-Pacific region. I still had a rifle in my hand and a backpack on my back, but I felt like my mood had changed,” Warrington said of meeting Westbaugh. Told. “I made his first institutional pitch in his second week. I was in the room with the trustees and the consultants, and I thought, ‘This is not going to blow.’ . We won the mandate. ”
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Warrington says his military background was an advantage, especially in his early days at Skagen, when he was still getting familiar with the money management department.
“People trusted me more than anyone else in the financial industry,” he says. “It gave me a good period to learn to be risky. I was also very lucky in terms of timing. Going into the financial crisis, there were a lot of highly educated and qualified people. and being comfortable with uncertainty was a competitive advantage.”
Skagen has evolved since it was founded in 1993 in a small town on Norway’s west coast, better known for oil and fish than for finance. The company initially developed products focused on the domestic market before developing funds to provide Norwegian investors with access to global companies and emerging markets.
Norwegian financial group Storebrand acquired Skagen in 2017. The transaction strengthens Skagen’s distribution capabilities and accelerates its international growth. But despite these changes, the boutique has remained true to its roots and continues to focus on its value investing style.
“Storebrands was clear from the beginning that they bought Skagen because of what Skagen is. They wanted that rather than tearing apart the equity platform and distribution.” says Warrington. “They didn’t know it was a good technology platform. One of the first things they did was adopt the Skagen technology platform and load a store brand asset management business on top of it. It was a hidden gem.”
Mr. Warrington currently serves as Chairman of both Skagen and the Group of Boutique Asset Managers, a global network of senior executives from small independent fund management groups. Topics among members include some of the regulatory changes sweeping across the wealth management sector.
“The challenge for all of us right now is driving regulation and driving technology, both of which are expensive,” Warrington says. “It feels as if European regulators are getting together and saying that instead of dealing with smaller companies, they just want to deal with a small number of very well-capitalized asset managers. The burden on us is huge.”
Not everyone will succeed
But it’s not just the smaller players who are feeling the pain. Some of the world’s biggest fund managers have posted declining revenue and profits since the start of the year, as headwinds such as high inflation and rising interest rates hit the sector. Abdon, BlackRock and Baillie Gifford have all announced job cuts in recent months, seeking to cut costs while investing in growth areas.
Despite larger companies grappling with these challenges, Warrington believes there is still a place for boutique groups. “One of the things about boutiques is that they are very focused on what they do,” he says. “Boutiques that stick to their knitting and focus on areas where they think they have some sort of competitive advantage are the ones that survive. Companies that add lots of bells and whistles and add non-niche products are the ones that stand out.” is.”
However, in recent months there have also been casualties at high-profile boutiques. Emerging markets specialist Somerset Capital Management, co-founded by Sir Jacob Rees-Mogg, went out of business in December after losing key powers from British asset manager St James’s Place. announced that it would be downsized. The mandate losses wiped out two-thirds of Somerset Capital’s assets, reducing them to $1 billion after the transfer.
read Inside the collapse of Somerset Capital
Meanwhile, global equities specialist Aldevora Asset Management, founded in 2010 by former Liontrust fund managers Jeremy Lang and William Pattison, announced in January it would close its operations and return funds to clients. did.
“Every time a boutique moves for the wrong reasons, it creates difficulties for other boutiques because we have to explain ourselves,” says Warrington. “What we are talking about is [at GBAM] It’s a ripple effect, it’s a backlash, it’s a response to clients reading about some of the failures. They come and ask, ‘Why doesn’t this happen to you? ”
Despite the closure of a few well-known boutiques, some fund management professionals still want to break away from large organizations and start new businesses.
Star manager Ben Whitmore announced in January that he was leaving Jupiter after 17 years to set up his own boutique, Brickwood Asset Management. Whitmore’s departure comes nearly five years after Alexander Darwall left Jupiter to form Devon Equity Management.
“Not every boutique will be successful. Building that critical mass is difficult at first. But once you establish yourself and get recognized for what you do, you have a good story in the long run.” That’s promising,” says Warrington. “There will always be a place for focused housing.”
resume
to be born
1964
education
1983-1986
Durham University: BA (Hons)
career
December 2023 to present
skagen chair
November 2023 to present
Storebrand Asset Management, Director of Wealth Management
2018-2023
Skagen Fund CEO
2017-present
Boutique Asset Management Company Group Chairman
2013-18
Deputy CEO of Skagen Fund
2010-13
Managing Director, International, Skagen Funds
2007-10
Skagen Fund, UK Managing Director
2005-07
Commander, 1st Battalion Royal Gurkha Rifles
To contact the author of this article with feedback or news, email David Ricketts.
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