What’s in a name?

What’s in a name? image

The merry go round of investment company ownership continues apace. We recognise that this can be unsettling for clients, so we shall try to update you on the most recent changes and our thoughts about what this means for you as investors. In most cases, it is simply a matter of company brand vanity and ‘rebadging’ with the new owners name but in other instances – there are likely to be more material outcomes and we will continue to monitor these situations.




Recent name and ownership changes.

Aberdeen & Standard Life – Aberdeen Standard Life investments

Earlier this year, two significant Scottish based but internationally active companies announced their plans to merger. From a business perspective the merge was a good fit with Aberdeen having a strong investment business with Far East expertise and Standard Life having the infrastructure and distribution of a major lies assurance company with activities in UK & European markets in pensions and life assurance as well as investment.

There are no prizes for their imaginative re-naming to Standard Life Aberdeen plc for the parent company and Aberdeen Standard Investments for the investment arm.

It’s disappointing to see two strong Scottish companies merge and inevitably this will lead to job losses as both firms are headquartered only a block away from each other in the centre of Edinburgh.

At present there are no changes to actual underlying investments and both firms will retain their own Standard Life & Aberdeen brands for the time being. Therefore at present the only impact may be a change of letter heading.

In the longer term, there are some considerations for ethical investors. Both firms run ethical funds but their approach and the range of investments differ. Standard Life tends to put more traditional avoidance policies at the fore of their ethical investments, whereas Aberdeen put a greater emphasis on assessing environmental, social & governance (ESG) risks. Both have their place and both firms have an established research and analysing team. We have already spoken to both teams but understandably “no comment” was the response on the mergers impacts on their investment teams – we shall continue to monitor closely.

For clients with investments in Parmenion Ethical Portfolios, you will be aware that they were taken over by Aberdeen in late 2015. We are advised and satisfied that the assets and management style of Parmenion Investment Management remains fully ‘ring-fenced’ and independent from the broader Aberdeen investment assets. We see no reason why the Aberdeen – Standard Life merger would change this position. Currently the Parmenion portfolios do hold some Standard Life funds but (on grounds of underperformance) do not hold Aberdeen Ethical World fund.

Here's what the Chief Executives have to say.


Friends Life & Aviva

Holders of friends Life policies have already experienced one name change (form Friends Provident) so can be forgiven for some weariness and concern at yet another change. The truth is that the market is consolidating as the nature of investment and the way we live changes the dynamics of whilst a life assurer can do. Friends have been too small for too long a time to compete. Demutualising Friends Provident was a way for it to raise capital but it laid itself bare to the vagaries of the market, resulting in the takeover by Resolution Life and rebranding as Friends Life. Now, Resolution has seen an opportunity to realise a profit on its acquisition and accepted an offer from the ever growing Aviva. For those who can’t place ‘Aviva’ - it’s the old Norwich Union – itself a combination of GA, Commercial union and others in the 1990’.

This is currently just a name change.  The merger was completed last year but it is only just recently that the re branding has taken effect. There is however, no change to any underlying funds. Hopefully, as we find Aviva far more efficient – there may be a bonus in improved administration.

For those of you invested in ‘Stewardship’ funds there will be no change but this is an issue that we are monitoring. A few years ago, Resolution conducted a review of funds and outsourced the investment mandate for these funds to Schroder’s Asset Management. They have continued to manage the funds along the original Stewardship guidelines. However, their ‘house style’ was much more about managing ‘governance risks’ than traditional ethical screening and this has led to some questions being asked about the management approach.

Aviva themselves have no in-house ethical expertise, having sold the Sustainable Futures brand in 2012. However, we feel that it’s unlikely they would also ‘off load’ Stewardship. It is a ‘flagship’ brand being the first ethical fund range established in the UK in 1984. As such, it represents significant value and a long heritage. We shall monitor this issue closely and keep in touch with both Schroder’s and Aviva to understand what the future holds for these funds.

 You can find Aviva's statement by clicking here. 

Henderson Global Care - Janus Henderson Sustainable

In the spring of this year, US based Janus Investment took over the UK business, Henderson Investors. Henderson were one of the early entrants into the UK ethical market and run a suite of Global Care funds, which are available directly and also underpin funds used in NPI life & pension products and Children’s Mutual CTF plans.

We met with the fund managers in April and were made aware that Janus saw the Global care funds as a valuable part of the business and were looking to harness that expertise. We had been monitoring Henderson funds because of concerns over changes made to their research and management in 2011 but are glad to report that we have been impressed with the new investment team who have taken to their role with enthusiasm.

When undertaking this review we were made aware (under strict confidentiality) of an on-going review being undertaken about the investment policy of the Global Care funds and their name. Henderson Investors sought our feedback on a number of issues which has been taken into account with regards to proposed changes.

It therefore does not come as surprise to us that we have received notice from Janus Henderson Investors regarding changes to the Henderson Global Care Growth Fund and to the Janus Henderson Global Sustainable Equity Fund.  This change will take effect from 15th December 2017.

The investment objectives for these funds and others will also be changed to reflect a slight change in directions. Embedded ethical screens are to be retained within the fund, but the emphasis of the investments is to be ‘tilted’ in the directions of more positive reasons for investment. This will reflect an increased interest in sustainability and in solutions to problems of the modern world, such as climate change, resource constraints, population growth, and an ageing population. In particular, there will be stronger policies in relation to fossil fuels. Janus state that “they are making these changes because they believe this will make a clearer connection to the funds’ investment philosophy and better articulate its investment aim and remit”.  

This change will also be relevant to holders of NPI pension and investment bonds as well as some Old Mutual & Children’s Mutual investors.

We approve of these changes and see no reason to change funds because of them. As the changes do not require shareholder approval, there is no requirement for you to take any action.

 You can get further information on these changes by clicking here

Cofunds & Aegon - Platform name change

Many of our clients will be aware that they hold investments with Cofunds. What is sometimes missed is that Cofunds is not actually an investment company but rather an administrative platform onto which individual funds can be placed and managed, so as to simplify administration and lower the costs of trading and investment.

The market for platforms has become increasingly competitive and the ability to access high quality technical resources and substantial capital are key to development. In the last five years or so, Cofunds has suffered form underinvestment and struggled with certain regulatory changes. It was previously owned by a number of investors with L&G being the largest.  In 2016, L&g accepted an offer from the Dutch life assurance and investment company Aegon. Aegon also own Kames Capital who many clients will be invested in and the old Scottish Equitable Life and pensions business.

As is often the way with these takeovers; the new owners now wish to push their brand to the fore, so rather than the current ‘dual-badging’ you will shortly see that branding replaced by the AEGON brand alone. Although Cofunds more accurately explains what the service does – we are not concerned about this re-branding. What is more important to us is the level of service and investment that will be put in to support services to our clients. Having reviewed developments that Aegon have been making in the core business with an investment platform called ASRC, we are satisfied that these changes will be moving the Cofunds offering the right direction. Aegon offers far superior IT resources and a more intuitive interface, when making account enquires on line. We expect that the service will also develop to offer a wider suit of product wrappers – although we currently use the service for straight forward fund management.

We are happy enough with these changes and do not see any need to change platforms for clients. We will however continue to monitor both cost and service.

You can read more on the implications of this merger here from moneymarketing.







Share this Post:

Related Posts: