July 2007

Team structure

What is your career to date?

I have over 20 years experience in a variety of mainstream UK based financial institutions. I started off at Norwich Union on a graduate training scheme where I had an introduction to different types of assets. Then towards the end of the second year I got involved in UK life funds. From Norwich Union I went on to Sun Alliance predominantly as an analyst and then moved into fund management in the early 90s. I then did two years on the sales side and spent time at UBS as a high income specialist research analyst. I then came back to the buy side through Prudential as a pan-European analyst. While I was there I covered a number of sectors during the TNT boom which was an interesting time to be in the market.

Then the Prudential M&G merger happened and that was interesting given M&G is very retail oriented and was bringing that expertise to a huge traditional life company.

A big challenge was working out the different requirements of servicing a big internal client as well as a large number of smaller external clients.

I joined Clerical Medical Investment Management which very quickly became Insight. I joined there as a fund manager but I became head of UK equities off the back of the Rothschild acquisition. That was the first time that I headed up a team. On the merger we thought about how we needed to run money, what structure we needed with regards to research and fund management, what kind of people were needed and what experience should they have. I spent two years setting up the team and looking at performance requirements. Now coming full circle, I left there last summer and joined Santander in December last year.

What attracted you to Santander Asset Management?

The interesting angle is determining how to structure a team to service different client bases. This is very important from the point of view of Santander's ambitions. Also a lot of the other organisations I had worked for were very UK focused with a UK parent company.

The global footprint Santander Asset Management gives us is very interesting, both in the way they analyse companies and the products they are launching.

Working out how we will integrate with the Madrid team is extremely interesting. They research particularly FTSE 100 companies while the UK-based team researches mid-cap and small-cap companies. We need to ensure we keep dialogue working between the two offices and we are doing that by using regular conference calls as well as a lot of company visits to ensure the teams know each other. I'm very pleased with the new hires I have made. They haven't been together very long and they are already working well together.

What are the main challenges?

The initial challenge has been to recruit the team that I currently manage to run the direct UK equity mandates that we have.

I had the team structure clear in my mind from the start as well as the style of investment I wanted to create.

Team members need to have a good rounded level of experience, have worked in similar kinds of organisations and be open minded enough to think about where the industry is going. It's a small team and members need to be strong fund managers and analysts who really want to work within a team structure and be willing to develop the business.

The next challenge is to get the investment process in place so we get all the systems in place to deal with Santander's global requirements as well as those of Abbey. The other is to start to really think about the new products we need to have in place to deal with the changes we have seen in the investment market.

We need to think about higher alpha long only funds, more plain vanilla long short strategies, more mainstream strategies.

We also need to start thinking about how far up in this curve we need to go in more specialist niche areas. What we can see is there are clearly areas of the market where using specialist managers is better than one huge company trying to do everything. So going forward we will certainly use third parties for more specialist niche areas but potentially within mainstream UK, European and Latin American equities we have in-house expertise that we can certainly utilise if required.

What are your plans for the future?

I suppose so far the plan has been to get people in place first and then get the processes in place. By the year end I'm looking to have applied new process to the funds and we should start to see performance coming through. We will also be starting to think about new products though their development will probably be during 2008.

John Bearman
Chief Investment Officer
Santander Asset Management