Octopus Investments - Best Investment Product Provider

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Fund management pedigree lies behind the foundation in 2000 of Octopus Investments, with a little dash of a product famously designed to do what it says on the tin.

Simon Rogerson (pictured), Chris Hulatt and Guy Myles, formerly fund managers at Mercury Asset Management, founded the firm, which has won Best Investment Product Provider, to create new types of investment, ones that come with the Ronseal promise.

CEO Rogerson (pictured) says: "The traditional approach at fund management firms is to design one of everything, so you have dozens or even hundreds of funds covering all equity markets. They then promote the small number of funds which have the best short-term track records – like technology funds in 2000, or commercial property funds in 2006. This rarely turns out to be in the customer's best interests." 

"The asset classes we invest in must all pass our Ronseal test. Our clients buy a product with the implicit promise that it will do what it says it's going to do and we try to align our fees with that promise."

Since foundation in 2000, Octopus has grown to manage GBP6 billion, have over 500 staff and some 70,000 clients. The business comes in from wealth managers and independent financial advisers and the firm is increasingly developing an institutional business with GBP2 billion now under management for institutional investors.

The key investment platforms the company has built are renewable energy, property finance, healthcare infrastructure, multi manager and smaller company investment. As an example, the firm's Property Bridge Finance business has lent GBP2 billion to property developers in the residential and commercial space and is generating returns of between 7 and 12 percent per annum, with negligible capital losses. The company has recently launched a P2P offering in this space – Octopus Choice – focused entirely on its own property finance deal flow and with the Octopus balance sheet in first loss position. 

"The reaction from wealth managers has been fantastic" Rogerson says.  "It delivers a 5-6 per cent income to investors, safe in the knowledge that our balance sheet will be hit first if any of the loans don't perform"

The healthcare infrastructure platform funds care homes, special needs' schools, and GP surgeries all of which need upgrading, and whose returns Rogerson describes as `boringly predictable' – this investment is offered through two limited partnerships run on behalf of larger wealth managers and institutions and also through the MedicX Investment Trust.

The ventures investment platform, which manages GBP500 million, offers venture capital trusts – now considered a genuine alternative to pensions – and has backed Secret Escapes, Zoopla and Swiftkey from start up. 

Rogerson points at an evolution in the wealth management industry as a driver for their success.

"The biggest change with wealth advisers is that, over the last few years, they have moved towards financial planning as a core part of their proposition, where previously they were focused purely on the investment proposition," Rogerson says.

"We offer two things. First, a series of products with tax wrappers around them that solve problems their clients face, whether it's income tax mitigation, capital gains tax deferral or inheritance tax mitigation. Secondly, we give them the confidence that the asset classes we invest in are going to do what we say they will."

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