The merger of Axial Investment Management with Ignis Asset Management brings together powerful capabilities in the investments and risk management space, under the Ignis Asset Management name.
Background
In 2005, the Pearl Group identified the need for improved analytical investment capabilities, broader access to alternative assets, and enhanced risk management skills and diagnostic tools. With no ready-made solution for the life assurance market, Pearl invested c£10m in building its own in-house company, and in 2006 Axial was launched. Three years on, Axial had grown to over 130 London-based employees and managed £22bn in assets for the Pearl Group, £1.6bn of which was within the Axial fund of hedge funds*.
Expertise
The Axial approach is based upon bottom-up risk analysis combined with bespoke systems, technology, dealing and investments expertise. This provides Pearl with integrated asset management, manager selection and asset-liability management capability - a service unique among UK life companies.
An enhanced proposition
With Axial’s specialist expertise and Ignis’ strength in traditional long-only products, joint ventures and substantial distribution capabilities, the decision was taken to merge the two businesses. The merger enables Ignis to provide an enhanced service to the Pearl Group and to external clients, with plans to offer the former Axial team’s expertise to a broader market.
Institutional clients increasingly seek more sophisticated investment solutions. Pension schemes are looking for investment managers that can tailor asset allocation and product selection to match their future scheme liabilities. With Ignis continuing to provide outcome orientated products and liability driven investments for the Pearl Group, it is a natural step to look at extending the service to external investors.
Institutional
The merger will see a strengthening of the Ignis fixed income desk with the former Axial team bringing significant skill and experience. The potential will also be explored for the launch of a high alpha fixed income product for the team aimed at institutional investors. In addition the existing fund of hedge funds, currently managed on behalf of Pearl Group clients, may be opened to select institutional long-term investors.
Retail
In the retail space, a number of the Ignis funds will potentially benefit from being able to utilise the asset allocation tools and techniques developed by Axial. The wider use of derivatives will also be considered for use across the investment division. In addition, Ignis will explore the possibility of broadening its range to offer outcome orientated products for third party investors. The merger forms another exciting step forward for Ignis and its investors.
*at 31/12/2008