John Bellamy has a number of employers on his CV yet has, to some extent, always worked in the same place. He brings a unique insight to the changing shape of wealth management in his role as head of managed funds at Waverton Investment Management, with more than a quarter of a century of experience.
From a humble start as a messenger at broker Buckmaster & Moore in 1982, the acquisition of the company by Credit Suisse in 1987 helped Bellamy progress. He rose through the ranks from a relationship manager to head of portfolio management in the financial services giant’s discretionary business in London.
In 2001, Bellamy changed teams again following the takeover of JO Hambro Investment Management by the acquisitive Credit Suisse. Then, in a further twist, he was part of a management buyout of that discretionary team, in 2013, which saw the formation of Waverton as it is known today.
Celebrating 30 years since the original JO Hambro team was formed in 1986, the company now has approaching £5bn in assets, with 90% of the 120-plus staff owning shares in the firm. Currently, there are 28 portfolio managers.
“With this we are all in it together. We all put our hands in our pockets and have made significant financial commitments,” says Bellamy, who now sits as director, head of managed funds service.
“It makes you far more collegiate, and there is genuine joy when other teams bring in some new business. In bigger organisations that isn’t always the case, but the MBO has been a real positive bringing new energy.”
Whether the business rises or falls, he says, lies with investment performance. This focus has meant a narrowing down of its asset allocation committee to four, with input from portfolio managers, and changes to how it invests in its core models.
The models – defensive, cautious, balanced and growth – are run through a global multi-asset approach. They are risk-rated and managed in a unique fashion in that each of the asset classes is wrapped in an in-house Oeic. The equity and alternative components are run by Bellamy’s managed funds team, while bond allocation is headed by Jeff Keen, director of fixed income and macro research.
A broad base
The team has recently added a “fourth leg”, splitting the core and tactical equity allocation. Making up around 60% of exposure to the asset class, the core is directly invested in stocks with no geographic or sector bias and is operated by the institutional global equity team at Waverton.
Bellamy’s team then overlays that with its favoured geographic, currency and style positions through tactical equity holdings in favoured funds.
“We offer a genuine institutional process and portfolios that are accessible to clients via IFAs on a platform,” he says. “The fourth leg brings down the TER of the portfolios considerably as well, because you are dropping some third-party components.
“In a market that is becoming incredibly cost conscious, that is very important to us and our clients. Our balanced model goes from a 1.1% total expense ratio down to 82bps, and that’s important from the IFA’s perspective; the TER goes lower but our margin is maintained.”
Bellamy believes the team is now at a place where it has the “best of everything” throughout the portfolios. “We’ve got direct bonds, but we don’t rule out some active bond funds if necessary. We’ve also got direct equity as a core with a very targeted specific return of index plus, but with very low volatility,” he says.
“Around that we can build our tactical views through active, passive or structured notes. Our protection strategy is built in, which is an insurance policy; then in the alternatives space we have some structured notes, aircraft leasing, student accommodation and catastrophe insurance.
“The investment world of products available to us is so broad and sophisticated now, it’s a far better place than it has been for some time.”
With this in mind, Bellamy stresses the team does not just pay “lip service” to multi-asset, with a philosophy of looking at “anything and everything”.
Asset-backed is an area of investments in which the managed funds team has been taking more of an interest in recent months, including the aforementioned aircraft leasing and infrastructure funds.
Bellamy says: “Infrastructure yields around 4.5-5% but there are several things you have to be mindful of as well, including the high premiums in the space and the fact that liquidity is not always there.
“There is no point running 4-5% weighting to one of those positions; you have to get as many of them as you can. We don’t just hold HICL but also GCP, 3i and INPP with a small percentage in each one, while keeping an eye on the premiums.”