Aviva Investors’ new boss yesterday unveiled plans to recreate the success of a £21bn superfund he ran for rival Standard Life, in a bid to revive his new firm’s battered fortunes.
Euan Munro, who joined Aviva in January to turn the faltering venture around, said three new funds launched yesterday could more than double profits at the group, owned by the insurer Aviva.
“If I told you my targets, you’d think I was delusional,” he said.
“I’m probably way more ambitious than any of the analysts in terms of what we can do.”
Aviva Investors reported annual profits of £93m last year – less than five per cent of parent company Aviva’s earnings.
Rival outfit Legal and General Investment Management represents about 20 per cent of its parent company Legal & General Group’s profits.
Munro revealed outflows had “substantially reduced” at the group and were now starting to slow down after a dismal period in 2012 and into 2013.
The 44-year-old previously pioneered Standard Life Investment’s Global Absolute Return Strategy (Gars), which he helped build into one of the UK’s biggest total return funds.
Aviva’s own version, the Multi-Strategy Target Return Fund, will run 20 to 30 different strategies.
The group believes bets on Japanese monetary policy and quantitative easing in Europe will turn good and deliver strong returns for investors. Munro believes that Aviva is well placed to challenge the Gars fund.
“I enjoyed my time at SLI, but it simply isn’t as broad as Aviva Investors,” he said. “There’s more here, we’ve got a broader set of capabilities, like the mortgage backed securities market in North America.”
Aviva is scheduled to hold an investor day next week to lay out its plans for the future.
Shares in the company, listed on the FTSE 100, rallied to close up 1.66 per cent at 519p yesterday.
PROFILE: EUAN MUNRO
Euan Munro, dubbed the UK’s answer to US bond guru Bill Gross, is only 44 years old but has already become one of the most powerful figures in UK fund management. He made the leap from the dealing floor to the C-Suite earlier this year – but the jump hasn’t fazed him.
“My role at Standard Life wasn’t sitting in front of a Bloomberg screen making calls on the market. It was leading teams of risk takers. I actually think that’s what the CEO of an asset management company should do – you are the leader of risk taking teams and that’s why I’m enjoying what I’m doing. Being a CEO is quite liberating. Nobody is getting in your way and I’m able to work with these guys directly to build the investment process.”
His arrival at Aviva has already generated interest in the industry, which is keen to see if Munro can replicate his success. “We’ve had more investment consultants through No 1 Poultry (Aviva’s headquarters) in the first three months of the year than we’ve had in the entire year before.” However, Munro is honest about the challenges he faces in attracting new fund assets. “We need to set this up, demonstrates that it works and it’s going to take several years before we get a track record. It might take that before some people buy in.”