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Waking the multi-asset giant

For almost two years, CEO Euan Munro has been reshaping Aviva Investors, putting its multi-strategy funds at the forefront of an outcome-oriented approach.

It is fair to say that Aviva Investors pulled something of a coup when, in July 2013, it named its new chief executive officer as Euan Munro. Having made his name as a key figure behind Standard Life Investments’ hugely successful Global Absolute Return Strategies (Gars) product, Munro left managing money behind to take charge at Aviva, which many considered something of a sleeping giant in the funds space.

Munro says: “While I did have a sizeable amount of money under management, I wasn’t doing it myself, I was leveraging off the size and insights of a broader team. At that level when you are running multi-strategy portfolios that involve expertise across a wide range of areas – needing to pull in rates, equity and credit – you don’t do that as a single individual but by leveraging the expertise and knowledge of an organisation.

“That is what attracted me to Aviva Investors, because here was an organisation with a huge breadth of asset class expertise, but the big gap was that nobody had pulled that expertise together into really relevant client solutions. I thought I’d be able to do that.”

Baptism of fire

Having spent 18 years at Standard Life, Munro was all too aware of the scale of the change. The challenge at Aviva was outlined by group CEO Mark Wilson as improving investors’ profitability, capitalising on the company’s expertise in managing its own funds and becoming a stronger third-party manager.

Munro admits to encountering a few surprises on joining Aviva in January 2014. On the downside, he found historical failures in control, with the regulator fining the firm for running hedge funds side-by-side with its fixed-income business.

In his own words, it was something of a “baptism of fire”, though on the upside he was also surprised by the calibre of the investment professionals at the firm. He says: “I was expecting I would have a lot of work to do to turn around the basic investment performance, which is the number one job for any asset manager. What do we sell? Its performance, so if we do not have that you have nothing to sell.

“But it turned out we had actually very good investment management talent in a broad range of areas. A lot of our fund managers were beating the benchmark; the issue was that they were not really working on commercially interesting propositions.

“They were managing mandates that were interesting to locally oriented insurance companies – beating a sterling corporate bond benchmark by 50 basis points is really interesting to an insurance company, but nobody else wants to buy that.”

Munro’s raison d’être at Aviva Investors has been positioning the firm to be recognised as a global leader in outcome-oriented investing. The launch in 2014 of its Aviva Investors Multi-Strategy (Aims) Target Return and Target Income funds – while drawing immediate comparisons with Gars –are the firm’s boldest statement of intent.

Part of the Mark Allen Group.