How Apiramy Jeyarajah is selling Nedgroup Investment’s new big idea

Read about our latest developments as published in Citywire Amplify.

The business moved with lightning speed to pluck veteran bond managers out of retirement for a new ‘in-house multi-boutique’ model and now, Apiramy Jeyarajah is building up a team.

Eighteen months was all it took for veteran bond manager David Roberts to retire from asset management and re-enter the industry; the change in markets came quickly and Nedgroup Investments made him an offer he could not refuse.

The group proved just as fleet-footed in bringing in someone who would mastermind the distribution of this new business arm: Apiramy Jeyarajah. And the new chief commercial officer is already in the process of hiring more salespeople.

Jeyarajah, previously head of wholesale at Aviva Investors, ‘joined halfway through’ the creation of the multi-boutique model, by which time Roberts had already come on board.

The setting-up of the fixed income business ‘was executed in a very short period of time,’ which had initially given her pause. But the message to her was that people involved knew each other already, so establishing common ground would move at a much quicker pace than normal.

Jeyarajah admits she was a little ‘sceptical’ about that claim at first ‘but actually, I’d speak to each one of them separately, [and] they’d say exactly the same thing!’

Roberts is launching the business with fellow bond vet Alex Ralph, who was most recently a senior fund manager at Artemis (and launched the £1.8bn Artemis Strategic Bond fund, as well as leading the Artemis High Income fund from 2014). She left in September 2021.

The South Africa and UK-based multi-boutique business offers a number of funds run by other asset managers so this venture is an attempt to expand with something homegrown.

Nedgroup Investments establishes partnerships with other asset managers to offer select strategies, many of them boutiques – but not all (behemoth BlackRock is a partner on the Core Global Fund).

These products, forming its Best of Breed range, include, among others, a global equity fund (Veritas Asset Management), a global flexible fund (First Pacific Advisors) and a global property fund (Resolution Capital). In all, the business – operating principally in South Africa and the UK – manages around $20bn.

Roberts and Ralph are launching what it calls a ‘in-house multi-boutique platform’, which, in multi-boutique speak, means recruiting expertise to open up a shop rather than buying a fully fledged business.

Roberts is building a business within a business, which includes hiring fund managers and salespeople to the unit.

‘We’re building a home for talent to enable the managers who, maybe in a different environment – probably 10, 20 years ago – might have set up on their own,’ says managing director Tom Caddick.

‘True market-leading managers who might have set up their own organisation. These days, that’s so capital intensive and takes such a long time, and [it is] so challenging to raise assets – which is fundamentally what you need to succeed.’

What you know and who you know

Starting anything new in asset management take patience. Funds need a track record and a certain level of assets before many fund selectors feel safe, or justified, in picking it.

An established portfolio manager helps, however, and with 34 years in the industry Roberts has experienced more of the bond market than many fixed income managers currently operating.

To spearhead the asset-raising effort further, Caddick turned to Jeyarajah. He first dealt with her about a decade ago, when she was HSBC’s head of global financial institutions and Caddick a CIO at Santander Asset Management – her client.

And her message to current clients is: you know David, his approach is a known quantity, he has known the people at Nedgroup for a long time, so there will be no surprises.

‘It’s very difficult to invest in a brand-new startup. It would be almost impossible if it was a brand-new startup into an unknown manager,’ says Caddick.

‘It’s giving an established house, an established name, but a new area within that. It’s distinct, very distinct, to just another investment desk. There is autonomy over process and approach, greater ownership of client.’

Jeyarajah says Roberts and Ralph will be involved in ‘tailoring’ product conversations with different clients.

‘If it’s a large organisation they may want to segregate and mandate, and you can do that specifically for them,’ she says.

While a typical fund launch would still be a unitised vehicle, ‘you could have clients that work with us over the design period to finesse what that looks like for them. But it’s just tailoring the way you position something.’

On the talent trail

If you have heard other distribution heads emphasise the importance of building partnerships with clients rather than pitching an existing product off-the-shelf, Jeyarajah is not going to shock you.

In her opinion, distribution is no longer about sending salespeople to clients with a ‘standard deck’ of presentation slides ‘that people just run through again and again.’

Instead, ‘it’s about actually listening to where the problem is, how that fits into the portfolio and addressing the concerns that they might have.’

This approach calls for different skills: ‘what’s really changed is in the demographics of the type of people we have in commercially facing roles now. It’s really around understanding the clients, being able to talk solutions with them, solving the problems that they might have, rather than a standard product push that has happened historically,’ she says.

But doing something different requires... well, a different approach. And if a different skillset is what you are looking for, the field is narrowed further. This is the problem facing any manager looking for greater diversity in their team, says Jeyarajah.

‘What tends to happen, you turn around and say: “I want someone who has X number years’ experience”. You shrink your pool straightaway.

‘Actually, we went to the market on skillsets; if you’re hiring salespeople, what are their listening skills like? How empathetic are they? Do they work well as a team? How do they engage with their clients? It’s those sorts of things that you go out to the marketplace for and you have a very different cross-section of people that come into that space.

‘Keep it in as broad language as possible because the other obvious thing is that if women look at a job spec, they look at the 5% they can’t do rather than the 95% they can do.’

A new sales skillset

Nedgroup is currently in the process of expanding its distribution team. Front of mind in that process is making the most of UK-specific opportunities, such as its advice market (highly fragmented but consolidating) and continued shift from defined benefit to defined contribution pensions (worth trillions of pounds and aided by government reforms over the past decade).

Jeyarajah takes the partnership point further. As any industry’s products become more commoditised, they shift to offering experiences. Jeyarajah uses the example of Apple: it creates products such as the iPhone, the iPad, Apple Store and Apple TV, but by linking them together it can deliver an experience.

‘Why buy Apple products? It’s the experience that we have, it’s not the product itself. So as a sales team, our role has changed from having to talk about the product to delivering an experience to our clients.’

Clients do not need salespeople to tell them how well a fund is performing. Artificial intelligence can now ‘generate all your core notes going on to the CRM’. And its mastery of data means a greater emphasis on human skills like emotional intelligence is called-for.

‘The emotional intelligence piece is always going to be required,’ says Jeyarajah. To see proof of this, all you’ve got to do is look back on how hard it was for asset managers to grow business during lockdown, she says, when face-to-face interaction was removed.

‘Even though Covid-19 allowed us to look into people’s homes and meet their children – which you [normally] would have done maybe after a 10 or 15 years of a relationship, not instantly – people weren’t wanting to develop business.

‘You can retain and service business and that was it. So, there’s something about that face-to-face that’s always going to be necessary to build trust in relationships.’

Another change over the past five years is that the sales process has gotten more drawn out, says Jeyarajah. And now it is ‘longer than it ever has been.’

‘It’s a one-to-many,’ she says. ‘You have to face off a number of people who are influencers and gatekeepers now. You’re effectively doing a firm-wide due diligence and investment due diligence with the fund buyer, but then you’re also working in their operational teams as well.

‘Everyone talks about qualitative and quantitative factors in assessing when you want to buy a manager. You’ve got all this stuff in D&I. The reality is can an individual be themselves? Can they thrive at work so they can provide alpha to their funds? That’s effectively what a firm-wide due diligence is.

‘You will have fund buyers come into the office and do that analysis. Once they start to get to know the firm, some of these periods start getting quicker. That’s what’s changed.’

Expansion plan

Nedgroup Investments has two fund ranges – Nedgroup Investments Funds Plc and Nedgroup Investments Multifunds Plc, both of which are Ucits V funds, domiciled in Ireland. The Multifunds range consists of three global multi-asset portfolios corresponding to three risk profiles.

The aforementioned Best of Breed funds are offered under the Nedgroup Investments Funds Plc fund range.

‘We are operationally set up in Europe already,’ says Caddick.

Will it go further? ‘You can expand into 10 countries if you wanted to,’ he says. ‘The question is why. It goes back to that client-centricity question: when people expand out of the UK into other markets, they go in with their product and ask “will you buy my product?” but the needs of a Swiss client are going to be different to the needs of a German client or a UK client. So, how are we going to support and solve a problem that they have? That takes time to do. If you’re going to do that well, that takes time.’

So – client-centricity: another popular talking point for fund distribution heads. But it can be hard to pin down. If it means solving clients’ problems, then ‘everyone’s problem is slightly different’.

‘Almost the worst conversation to have is the conversation that says: “I’ve got this fund. I want to come and talk to you about it”,’ says Caddick.

‘You’ve not even had the client-centric conversation, which is: “I’d really like to understand how you do what you do, to understand what types of strategies you look for and how we might be able to help.”

‘That’s a client-centric conversation. The sales push is “here is something in my kit bag I want to talk to you about” when you haven’t even got a clue whether it’s of any interest or of any use to anyone.

‘Those are the sorts of things, and whether it’s early engagement with clients or potential clients on our fixed income proposition. You could create something in an ivory tower and then go to market and say “here we are”, or you can engage early on and say, “how can we develop something that meets client requirements?”.’