The first half of 2014 saw third party net inflows of AUD 7.7bn, record third party assets under management (AUM) of AUD 195.6bn, record total AUM of AUD 353.5bn and record operating profit before tax of AUD 189.8m.

Keith Skeoch, CEO, Standard Life Investments said “I am privileged to have been the CEO at Standard Life Investments for just over ten years now and pleased to be able to report another strong set of half year results. However, as a firm believer in the benefits of long term active investing, what pleases me most are the strong relationships we have established with institutional and retail clients around the world over the past ten years. A defining decade for Standard Life Investments which, despite some of the most volatile and challenging markets experienced in recent times, has seen:

• Third party AUM increase over six-fold from AUD 39.5bn to AUD 195.6bn*
• An unbroken decade of third party net inflows with cumulative net inflows of AUD 120.9bn representing a ten year CAGR of 14%, accounting for two-thirds of the increase in AUM
• Third party net inflows from overseas clients increase from 3% to 57%
• Operating profit increase over ten-fold from AUD 15.5m to AUD 189.8m
• Excellent investment performance with third party AUM above benchmark: one year 87%; three years 89%; five years 91%; ten years 81%
• Standard Life Investments become the largest active manager of purely UK Pension Assets, up from 20th position in 2004**
• Standard Life Investments move from 39th in 2004 to 5th in 2014 for UK retail AUM***

“The strength of our investment performance and net inflows over the last decade mark Standard Life Investments out as one of the leading asset managers. Our success and rapid growth as an active fund manager in a decade that saw a general increase in the use of passive strategies is testimony to our ‘Focus on Change’ investment philosophy. There is also growing global recognition of the benefits clients can gain by working with a manager who is seen to add value by taking a long term approach to investing.

“The addition of Standard Life Wealth and Ignis Asset Management present a great opportunity for us going forward. They will help deepen our investment capabilities, broaden our third party client base and strengthen our strategic position.

“I am confident that as we look forward to the next ten years Standard Life Investments has the proven investment expertise and global distribution capabilities that will continue to deliver both superior investment performance and innovative solutions for our clients.”

———-

*If the AUD 107.6bn of Ignis Asset Management funds, as at 31 Dec 2013, are included the increase is over ten-fold. ** Source FT research. *** Standard Life Investments

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Tyndall and Ignis form strategic alliance.

Tyndall Investment Management Limited (Tyndall AM) and UK-based Ignis Asset Management (Ignis) have announced a strategic alliance in Australia.

Under the terms of the agreement, Ignis will sub-advise new absolute return debt product and liability management strategies exclusively with Tyndall AM into the institutional market in Australia.

Ignis is a wholly owned subsidiary of Phoenix Group and has approximately A$110.8 billion1 of total assets under management. Ignis has a long and successful history of managing life insurance and pension fund assets on behalf of its parent company, Phoenix Group, the UK’s largest closed life and pension fund consolidator. Ignis also has significant third party operations in the UK and Europe. Building a truly global business is a key objective for Ignis.

Tyndall AM is part of Nikko AM, a leading independent fund manager in Asia headquartered in Japan, and the arrangement with Ignis follows the announcement last that Nikko AM has acquired Treasury Asia Asset Management (TAAM) from Treasury Group, with Tyndall AM to handle distribution of its Asian equity strategies in Australia.

The addition of Ignis’ investment strategies to Tyndall AM’s current capabilities, including Australian equities, Australian and international fixed income and credit, alternative assets and multi-manager funds, as well as the recent Nikko AM acquisition of TAAM, means that Tyndall AM will now offer a broader range of both domestic and international offerings to Australian investors.

Initially, Tyndall AM will offer Ignis’ Absolute Return Government Bond strategy and Liability Driven Investment (LDI) solutions to institutional investors. Tyndall AM may also consider other Ignis investment strategies, such as emerging market debt, as part of its multi-manager and World Series Fundä platform offerings in future.

The agreement with Tyndall AM is Ignis’ first such venture outside of the UK and Europe and represents a significant step in the continued development of its operations globally.

Allan MacLeod, Head of Global Accounts at Ignis, commented: “At US$1.6 trillion2, the Australian pension market is the fourth largest in the world due to the compulsory superannuation savings requirement and is an attractive market for Ignis where our expertise and strong heritage in managing life insurance and pension fund accounts is especially well suited.

“The numerous initial meetings we have had with prospective investors in Australia have helped to reaffirm the region as a key strategic objective for us. We felt that working with a strong local partner was the most attractive way of accessing it.

“We look forward to working with Tyndall AM, one of the most respected investment managers in Australia. Its deep understanding of the requirements of local institutions, including insurance companies, and considered approach to client service makes it a natural partner for us,” Mr MacLeod said.

Mike Davis, Managing Director of Tyndall AM, said: “A strategic alliance with Ignis Asset Management is a good fit for Tyndall AM. Ignis is a forward thinking and progressive business with a strong product range and a rich insurance asset management heritage in the UK and Europe.

“This strategic alliance with Ignis further complements our objective to add local and international product solutions to meet the demand we are seeing from our client base.

“Initially, Ignis has chosen to focus its offering in the Australian market around its core strengths in fixed income absolute return and LDI, disciplines in which Ignis takes an innovative approach and has a strong track record.

“Consequently, in addition to our own strong offerings in a range of asset classes, we can now add international investment strategies that we believe will be attractive to local institutions,” Mr Davis said.

The Ignis strategies to be distributed in Australia are:

Ignis Absolute Return Government Bond Strategy

The Ignis Absolute Return Government Bond Strategy seeks to achieve its returns by translating macroeconomic views into carefully diversified long and short positions predominantly in the most liquid government bonds and currencies. Underlying investments are split into seven diversified sources of alpha that are carefully blended to provide a low correlation with other assets in order to deliver positive returns regardless of market conditions.

Since its launch in Europe and the UK on 31 March 2011, the A$2.6 billion3 fund has delivered a total return of 18.5 percent4 and an annualised return of 7 percent4 net of fees. Most importantly, the fund has achieved these returns with a very low level of risk. The fund has achieved its return with a standard deviation of 3.3 percent4 and an information ratio of 1.964. The fund’s consistent track record of meeting or exceeding its performance objectives has made it one of the most popular absolute return funds with UK and European institutions.

Liability Driven Investment

Ignis is the UK’s third5 largest manager of “with profits” funds and is the UK’s fifth5 largest manager of annuity assets and has extensive experience of managing assets alongside liabilities. Ignis manages approximately A$45.5 billion6 of assets against liability benchmarks.

Ignis’ scale as a major fixed income manager (approximately A$82.8 billion1 of total fixed income assets under management) and its history of managing assets against life and pensions liabilities ensures it has developed systems to give it the precision, control and flexibility to manage assets effectively against a range of benchmarks. Ignis’ pragmatic and tailored approach aims to provide closer matching, greater efficiency and cost transparency for insurance companies and pension schemes.

Ignis Absolute Return Emerging Market Debt Strategy

Ignis manages approximately A$725 million3 of emerging market debt (EMD) assets and has developed an EMD absolute return strategy designed to maximise risk-adjusted returns by investing in emerging market fixed interest securities, foreign exchange and financial derivative instruments. The strategy has been successfully run for an institutional client in the UK since January 2012 and a Luxembourg-based UCITS IV fund, based on the strategy, is being prepared for launch in November 2013 – subject to regulatory approval.

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