ECU confident multi-asset structure ready for limelight

Antony John, CEO of the ECU group of currency specialists in London’s Mayfair, is trying to spread the gospel of diversifying risk. His newly-refreshed group, which he joined during the summer of 2012, specialises in currency management, overlays and multi-asset investments.

Currently managing a boutique running $360m (€258m), he expects this to be more than doubled, if he can realise his dream of buying up a new team to help boost capacity and assets.

“Equity markets have pushed on and climbed a wall of hype,” reflects Mr John, who has done the rounds of the asset management business, having served successful stints at Hill Samuel, Lombard Odier and French bank BNP Paribas.

But his beloved multi-asset discipline of managing portfolios will soon come into its own, once quantitative easing begins to fade, he believes.

ECU’s star-studded team of investment strategists includes Professor Charles Goodhart, formerly chief adviser to the Bank of England, former Citibank, Merrill Lynch and UK Treasury economist Neil MacKinnon and ex RBS prop trading boss Neil Staines.

The business proposition is to offer access to this exclusive team to a small coterie of family offices and private banks, who “appreciate the value of receiving unbiased, unscripted advice at the highest possible level”.

Clients are invited to quarterly three-hour behind-closed-doors meetings of ECU’s 10-strong global macro team. The objective is to provide clients with insight and advice on “major turning points in world politics, economics and markets,” that can materially affect the structure and performance of their portfolios.

“The cult of equity is dying and people now are realising they need much more diversified sources of alpha to achieve returns across economic cycles.”

The banking crisis, he says, also saw a reversal of the concept of risk-free assets with bonds issued in many markets now becoming a more dangerous asset to hold than equities, due to structural changes.

“People have gone back to realising the value of real assets,” says Mr John. “And they can’t ignore the value of emerging markets, despite the impact of recent setbacks. All of this points to a multi-asset structure.”

Groups such as Standard Life in the UK are credited as the pioneers of such an approach, he says, with other insurance companies including Aviva also gaining a reputation.

“The Goldmans and Alliance Bernsteins have done this for many years on a private client level. It is simply a process of natural evolution,” he explains.

“A number of people want to be in this space,” says Mr John who currently caters to an audience composed mainly of private banks. He was previously boss of the IMS multi-managers operation at French bank BNP Paribas, although he admits the silo mentality in many large groups – despite a friendly “village of boutiques structure” described in company manuals – has hindered the co-operation between different units, which a successful multi-asset offering requires.

“I have spoken to a number of large groups, and there are too many silos. How are going to get them to work together? You need a strong solutions capability in the asset management business of the future.”

He is now keen to rebuild the multi-asset, multi-manager facility he oversaw at the French bank within an independent-thinking group.

“I could see that what organisations are actually doing and what they are aspiring to do are very different things,” he says.

 Mr John admits that all may not be plain sailing for his newly invigorated investment boutique. “Like anything in this business, having a vision and doing something about it are very different propositions,” he warns. “But we are flexible and with very deep pockets backing us.”

Barriers to entry today are much higher than they used to be for new asset management shops, he says. “I might be wrong about potential multi-asset growth. But we are more of a speedboat business than an oil tanker, so we hope to take advantage of the twists and turns along the way.”

Mr John has long been a popular figure in the UK asset management industry, particularly within the multi-management community, but has struggled to breech the “glass ceiling” of locally-reared top talent in continental European institutions, despite no apparent lack of ambition and drive.