Treasury & Asset Management
Asset Management
Insight
In 2007, Insight saw net inflows of £9.8bn (2006 £13.4bn), a strong performance despite the delay in the funding of new business in the second half of 2007 caused by the global financial markets dislocation. This has resulted in a very strong year end pipeline of won, but unfunded, business, which Insight expects to fund in the first half of 2008.
Insight’s expansion into Europe has begun to translate to sales with several new mandates funding in the year. Overall, assets under management increased by 11% to £109.1bn (2006 £98.6bn) after the transfer out of £4.2bn, as part of the agreed sale of Equitable Life funds.
The restructure in 2006 of Insight’s UK Equity platform has led to much better performance in 2007, with active UK Equity funds ahead of benchmark. Global Equity continues to outperform over all periods whilst European Equities performed below benchmark during the year. Following several years of consistent out performance, UK Fixed Income underperformed during the year but our cash funds remain ahead over all periods. Despite turbulent markets, our flagship Diversified Target Return fund outperformed its cash benchmark in 2007. Absolute Insight was slightly behind benchmark for the year, however it sits well amongst its peers given the capital losses and subsequent mass outflows experienced by many of its competitors during 2007.
Insight achieved recognition as one of the market leaders in the Institutional pension market by winning several prestigious industry awards. These included:
- LDI Manager of the Year & UK Fixed Income Manager of the Year, Financial Times Business Pension and Investment provider awards;
- LDI Manager of the Year, Global Pension Awards; and
- Eurozone Fixed Income Manager of the Year (Govt bonds) & Eurozone Fixed Income Manager of the Year (Govt bonds & non Govt bonds), Professional Pensions’ Specialist and Alternative Investment Manager Awards.
Insight was recognised for the contribution it has made in developing corporate governance and investor responsibility, by winning the Socially Responsible Investment Programme of the Year award from Funds Europe magazine.
Invista
Despite the slowdown in the UK commercial property market in 2007, Invista, our 55% owned fund management business, was still able to grow its business by successfully completing three significant balance sheet investments. In the first half of the year, Invista acquired two portfolios with long standing JV partners. The first was a €348m French portfolio and the second a £127.5m UK residential portfolio. Furthermore, Invista successfully launched a pan-European Opportunity Fund, to which it committed to invest £25m, alongside other investors in the fund.
Invista continues to focus on growing its recurring management fee income and has done in 2007 with the new funds launched, at higher margins than the average fee rate across its existing range of products. Investment performance of the underlying funds is one of the important priorities for Invista and continues to be strong. 80% of assets under management have out-performed their benchmark, over a one year period to 31 December 2007.