Seneca Investment Managers chief executive David Thomas does not expect the firm to be involved in the wave of consolidation currently gripping the fund management market.
Mr Thomas told FTAdviser the firm had started to feel the benefits of the economies of scale as it grew in size but he felt that could be dented if the firm got too big.
Assets under management of the Liverpool-based fund house had risen to above £700m, after it saw net inflows of £100m in the year to the end of September 2019.
Mr Thomas said: “We are only starting to see it, and certainly as we get a bit bigger there is plenty more benefit from economies of scale, but I think that when firms get very big indeed, the benefits are not as obvious.
"We are profitable as it stands and have been able to be profitable but at the same time invest in areas of the business. I don't expect us to be involved in any of the M&A consolidation happening in the market at present.”
The market turbulence of the past year has sped up the pace of consolidation in the market, with Liontrust buying Neptune and Miton and Premier agreeing to merge.
Mr Thomas also said the company had no plans to replace Peter Elston, the firm’s chief investment officer, who resigned earlier this month.
Seneca Investment Managers operates two open ended funds as well as an investment trust, and segregated mandates, and Mr Thomas said there were no plans to expand its product range for advisers in the near future.
Instead the company wants to attract more advisers to its multi-assets funds.
He said: “We are in the happy position that the funds have been performing well for quite a while, and so the growth has been organic.
"We know there are a lot of financial advisers out there who use multi-asset and who we have not reached yet, and that is where we hope the growth comes from.
"There is a trend in the market for advisers increasingly to use multi-asset as part of the way they outsource the investment management functions, allowing them to concentrate on the personalised financial planning, and I would expect that to continue.”
The most recent set of accounts for Seneca showed the company made a profit of £290,000 in the 2018 calendar year, a more than 400 per cent increase on the £61,000 profit made in the previous year.
Among Seneca’s shareholders are Mr Elston, who has a stake of just under 10 per cent, and former Liverpool FC chief executive Rick Parry.
david.thorpe@ft.com
