The big picture from a macro perspective

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  • 09 mins 03 secs

Learning: Unstructured

Rachel Elwell, CEO at Border to Coast discusses public equities, fund launches and whats to come in 2020.
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Rachel Elwell is the CEO off border to coast and she joins me now. Or Rachel, you're in the middle of a Siri's of fund launches at border to coast. Where are you at the moment? So we've done a lot of work building the public equities capabilities so predominantly to start with, we were looking up building our internal management capabilities. That's partly because we were taking staff from the partner funds who did Internal Management s O. Because they were giving us their assets on their stuff at the same time, we needed to focus there. But that gave us quite a lot to scale early on on then. We've over the last 12 months being focusing on the externally manage public equities. So we've done a couple of really big things. And then I'm really pleased that we successfully launched our large Global Equity Alfa Fund just over the last couple of weeks. Eso We're now up to about 15 billion of public equity assets under management. We also recognized very early on that we needed to focus on private markets. There's a big shift in the l G. P s looking at moving from public into private markets. They are complex markets to do through pulling. So we focused alongside the public equities at looking at how to help our partner forms invest in private equity infrastructure, private credit. So having done those things were now really starting to look up becoming a proper multi asset manager. So we announced a couple of months ago the successful managers for our Investment grade credit fund, which is due to launch early next year. And we are in the middle of the process of building our multi asset credit fund, which is a global fund that hopefully will launch during next year. That will take us hopefully to the order of 25 billion of assets under management towards the end of next year. Andi. Then we start to look at some of the more complex things such as property such as can we transition like a sea alternatives that liquid, uh, on dde some of the other aspects off equities which currently we've not gone to which we need to look up with our partner funds. There's obviously a big pressure on costs. What's your attitude to active management versus passive management? So I think it is possible to deliver active returns that low cost. But I also think that there was a role for passive in public equities or where the markets of particularly efficient for bond markets. However, I think that passive management is questionable, particularly in credit benchmarks are set up deliberately to have more invested in the most indebted companies won't really ought to be thinking very hard about whether managing credits passively is the right thing to do. You've obviously created a number of funds, pulled a lot of people together. But have you actually, deep down, you feel created a separate asset management firm? I should hope so, because we're managing over 15 billion of assets now and we're properly regulated. Um, with all of the structures that Asset Manager has on its own culture, that's developing its bean a tremendous ride over the last couple of years. If I think back two years ago I was just starting, I was the only employee. I was incredibly fortunate with the people who agreed that they would come and join, um, the sheer amount of work that the part of funds on the project team had done prior to joining meant that We did have a very strong platform for success to go on and build. I'm often asked, What's the difference is between the poles on DDE. I'm one of the things that quite often you hear is the border to coast has 12 like minded partner funds. They're not like minded in a lot of ways. They have different investment beliefs. They have different strategies. They have different funding levels. But one of the ways that I think they are like minded is that very prepared to roll up their sleeves and make difficult decisions. So one of the things that they have one of the things that they decided, for example, was that we would have one location in Leeds, which probably wasn't an easy decision for them to make. When you think about where the different internal teams were coming from ghoul, Barnsley, Middlesbrough. But actually doing that in Leeds makes my job a heck of a lot easier in terms of building a single culture on an organization that feels like a new organization. Will you talk about building a big headquarters essentially in Leeds and all that expertise you need asset management S G and so forth is leads. The right place to attract and retain that pool of Taliban unit at least, is a great place. It already had a strong financial service, a sector of the building societies, the bank's wealth managers, strong consultancy. I was absolutely delighted. And it's one of the reasons that I took the role to be given the opportunity to build an asset management business in leaves and just add to the strength of that financial service sector in Leeds. I'm I'm constantly surprised and I don't know why about the number of people who contact me on leaked in, saying I'd like to come home. Can I have a job, please? I think in terms of the attraction for those people, the ability to make a difference in which is sometimes seen as unusual in the financial services industry, we have over 1,000,000 members across our 12 partner forms. Over two and 1/2 1000 local employers, including the local authorities across those partner forms, many millions of taxpayers. It's a really important thing that we're doing here to add value to those. It's also a really interesting opportunity because we're building something new and that gives people the opportunity to bring things that they know or to step up and learn themselves on. Did a fantastic place, which is Yorkshire were looking to the future. What are some of the potential challenges that you face? I mean, not least there's eight pools of El GPS balls, but my mind, someone future, not decide to have five or three. How do you take that into account? I think to start with what we're doing is really complicated. We're building asset management businesses from scratch outside of the usual areas that they're built. We are working with very many different stakeholders. Even within our part of funds. There are the elected members on the officers on the pensions boards on the local employers, so many different stakeholders who need to know what we're doing in order to first to build this successfully. So are my absolute focus for this next period is just making sure that we do what we need to do really well, what happens in the future? We can look around the world and see the sorts of things that might happen, but for now it's absolutely focusing on what we need to do to make it successful. You worried that a chancellor of the exchequer, for example, in the future might see a big pool of assets, and I want to direct whether gets back, You know, there are all sorts of things that are existential threats in all walks of life. I think it's important that we focus on the things that we can do and that we can control whilst making sure that if we're doing a good job, it makes it harder for those things to happen on. Also, L. G. P s says actuarial valuations, investment strategy of reuse coming for all the underlying 12 funds. What's the difference is that that make your plans for 2020? It's difficult. Thio plan for a transition on dhe building. These new funds come take 9 12 15 months. So we've been working very hard with our partner funds for the last 18 months with the knowledge that that was on its way to try to understand what the direction of travel might be. So I mentioned about bringing forwards the alternatives capabilities because we knew having talked to them, that that was going to be something that we needed. So we know that they are maturing slightly. Not as much as private sector, but cash flow starts to become more important. So things looking up, how do we help him have the income that they need to pay their pensions? Those sorts of things are starting to become more important to our partner forms, which effects how we then design the things that they needed to build. We have to leave that, Rachel. I will. Thank you very much. Thank you.

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