John Ions is apologetic. It has taken more than two years and five cancelled meeting before we finally manage to speak.
“You’ll have to excuse me for that,” says the chief executive of Liontrust, a listed UK asset manager.
But then Mr Ions has been busy. Under his watch the company’s assets under management have grown from £1bn to £28.1bn over a little more than a decade, and have almost tripled since 2018 alone.
He has also spearheaded a string of acquisitions, including the purchase of rival fund house Neptune in 2019 and Axa’s Architas UK investment business in a deal that closed in November.
Mr Ions reams off a list of reasons for Liontrust’s success, including having the right products, listening to clients and “momentum”.
But then he issues a caution: “The world is a very uncertain place. Anyone who claims to know what the future holds is at best guessing. [That] is quite difficult because we invest for the future.”
Over the course of two hour-long conversations several months apart, Mr Ions speaks frankly on everything from which asset managers he thinks are doing a good job to his own future.
The investor is both self-assured and modest (his business would be in trouble, he says, if he were the brightest person there). In another contrast, he gives the impression of being an entrepreneur who is quick to make decisions, while also proclaiming the importance of meticulously following a process.
“The whole business is anchored in process,” he says, speaking in late summer from his holiday home in Portugal, where he decamped with his family as Europe went into its first lockdown.
“Through a period of uncertainty process is key. What we are trying to do is increase the probability that the next decision is more likely to be right than the last one.”
Liontrust Asset Management
Ownership Listed on the London Stock Exchange
When we talk a few months later, Mr Ions is in his office in London. Although working remotely had been “good”, he says being back at the London headquarters has been a “breath of fresh air”.
The business had initially coped well based on a combination of “adrenalin, fear . . . and the process that was deeply embedded across Liontrust”, he says. “But after about six months, you think there are certain bits missing [such as] that transfer of knowledge [and] interaction with colleagues.”
While some have argued that the pandemic will lead to a shake-up in working practices, Mr Ions strikes a more cautious note, arguing large-scale working from home could mean businesses like Liontrust lose their competitive edge.
“The more and more you are working from home, effectively it is a little like outsourcing,” he says. “I still believe you need people in the office, you need that interaction. You need that ability for people to learn on the job.”
The conversation turns to life after the pandemic. While we are “a long way away from returning back to a pre-Covid place”, he suggests the fallout will not be as difficult as the financial crisis.
“This is different to the financial crisis in 2008 where the banks needed bailing out. The banks now are charged with maintaining or supporting the economy. You will see that continue,” he says.
At the same time, investors are “prepared to back quality businesses through this period. We will see new equity financing coming into the market . . . and people taking up those options to back and support those businesses.”
One of the upsides of the pandemic, he argues, is that unlisted companies, which often turn to private equity for financing, may be more tempted to go public in future. “Maybe the value of the stock market — and the access to capital that the market can supply for those businesses — will be more appreciated,” he says.
Still with huge volatility in markets over the past year and often sky-high valuations, he argues, investors need to be careful when backing stocks.
Born 1966 Newcastle upon Tyne
Total fixed pay £387,000
1980-85 King’s School, North Tyneside
1985-87 Undergraduate degree in business finance, North Staffordshire and City of London Polytechnic
1987-90 Manager of offshore sales, Henderson Administration
1990-93 Head of sales, Dresdner Bank
1993-97 Head of distribution, Aberdeen Asset Management
1997-2004 Joint managing director, Société Générale Asset Management; co-founder and chief executive, Société Générale Unit Trusts
2005-10 Chief executive, Tactica Fund Management
2010-present Chief executive, Liontrust
This is where good active managers can prove their worth, he says. Despite repeated studies finding that passive funds overall outperform active funds, including in 2020, Mr Ions says the statistics are distorted by so-called closet trackers — which closely mimic their index while proclaiming to be actively managed.
There are plenty of good actively managed funds, he says, pointing to Liontrust’s special situations product and its UK sustainable funds as examples.
Still active investors are facing intense pressure, with fees and profits falling on the back of the rise of passive management. The sector has been awash with M&A deals, as stockpickers buy up rivals in an attempt to build scale and lower costs.
Mr Ions is not convinced, however, that you need to be a juggernaut to do well in asset management. “Size and critical mass for the past 10 years has been what people champion. But the bigger you get the harder it is for you to add value.”
“If you have $50bn in a sector, I’d argue you are not really a fund manager, you are more of an administrator,” he says, arguing that in such cases the big question is often how to deploy that capital without making a mistake.
“When . . . you are driven from a risk point of view to being closer and closer back towards the index, your ability to outperform is less. That is fine but that is called index fund management.”
Despite these concerns about size, he does not rule out any future acquisitions. He is quicker, however, to push back against the idea of a sale of Liontrust to a bigger player. “I don’t play nice with anybody,” he replies. “It is not something we are looking at.”
Throughout the interviews, he mentions peers that he believes are good at what they do, such as Impax, a listed specialist sustainable fund manager. It is interesting, I say, that you compare yourself to the likes of Impax rather than a generalist asset manager such as Jupiter.
“We like to compare ourselves with the people who are doing well. It’s very easy to beat the people behind you,” he says.
As the conversation draws to a close, he turns to his future and where he might be in five years. “Probably still behind this Formica desk,” he says, laughing. “I am very lucky . . . I would like to be a more successful and bigger business than we are, but just continuing to do what we do.”
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