PAM Awards 2001
by Ian Orton, Editor of Wealth Management

There may have been a total of eighteen private asset management firms short-listed for the fourteen major prizes in this year's PAM Awards. But any assertion that 'everyone's a winner' would have very wide of the mark. Newton Investment Management, the European asset management arm of Pittsburgh-based Mellon Bank, managed to walk off with 5 awards, so equaling the feat of Chiswell Associates last year.

The awards, which reflect the outcome of the annual PAM Poll, were made at the PAM Awards Night at London's Dorchester Hotel on 29 March 2001. Newton picked up the top awards in both the affluent (portfolios up to £1 million) and high net worth categories (portfolios over £1 million). In the former category they came out on top for best growth portfolio, quality of reporting and overall service quality. In the high net worth category they won the awards for best growth portfolio manager and overall service quality. "Cynics could, of course, claim that the this year's poll results reflect the extent to which Newton personnel were prepared to use the thick brown envelope," said James Anderson, editor-in-chief and chief executive of Tru-Est, the publishers of Wealth Management.

"The reality is really rather different. "Over the past few years Newton has built up a reputation as a private client investment management that must now be second to none both in terms of performance and service. They quite clearly have a large number of fans and this was reflected in both this year's poll and the deliberations of the PAM judging panel. This consists of representatives of all the UK's major investment management selection firms as well as other prominent figures active in the wealth management sector. Newton quite clearly fully deserve their success."

This was the third year in succession that Newton had achieved significant success in the PAM Awards. A number of other firms that had achieved success in previous polls also featured prominently. Chiswell Associates showed that the success they achieved last year was no fluke. They were shortlisted for three awards in the high net worth category and walked off with the prize for quality of reporting. "Chiswell Associates was the surprise package in last year's poll," continued Mr Anderson. "But based on the results of this year's poll it seems clear that the firm looks set to retain a prominent position within the UK wealth management market for some time to come. Chiswell have a very interesting story to tell. Their experience shows, for example, that a strong charity business can provide a very good springboard for success in the private client sector."

Singer & Friedlander Investment Management, which have also achieved considerable success in previous polls, were shortlisted for five awards. In the affluent category they won the prize for best product and service range, as well as transparency of fees. "Singer & Friedlander continue to receive complements in terms of investment performance and in terms of their ability to deliver specialist products and services," said Mr Anderson. This was reflected in the number of times they appeared on shortlists and in winning two awards." Rathbone Investment Management, which also performed well last year in the emerging affluent category, was another firm that featured prominently in this year's poll, especially amongst the affluent categories where it won the award for image and reputation. The only other firm to win more than one award was Schroder & Co. Schroder won the award for best defensive manager and best balanced manager in the affluent category. It was also shortlisted in another three categories, making it one of the most prominent firms in this year's poll.

There were, however, three new award winners, Global Asset Management (GAM), Sarasin Investment Management and Guernsey-based Rothschild. Global Asset Management, now a subsidiary of UBS, came out top in the best defensive portfolio class in the high net worth category. "GAM proved conclusively the value of using hedge funds within a portfolio to protect capital as well as boost performance during what turned out to be an extremely difficult market to call," pointed out Mr Anderson. "GAM's portfolios performed brilliantly during 2000 and they fully deserve the award for best defensive portfolio in the high net worth category." Sarasin Investment Management won the award for best balanced portfolio in the high net worth category.

"This was one of the most competitive classes within the entire poll," said Mr Anderson. "This should come as no surprise. The balanced portfolio is probably the single most important product offered by a private client investment manager. As a consequence Sarasin Investment Management's success is particularly noteworthy, not least because they show that lack of size is no impediment to good investment performance, or success in the PAM Awards. Sarasin are one of the pioneers of multi-themed investment. Over the years, as practiced by Sarasin, this has generated outstanding risk-adjusted returns and the firm fully justifies its success." LCF won the award for best specialist portfolio in the high net worth category. "Like GAM, has used hedge funds successfully to boost risk-adjusted performance for some time, a feature that was recognised by both participants in the PAM poll and the judging panel " said Mr Anderson. One surprising feature of the poll, however, was the extent to which a number of the giants of the global wealth management industry were under-represented in this year's poll. Both Credit Suisse and Merrill Lynch were shortlisted in a number of categories.

And GAM, a subsidiary of UBS, won an award. But Deutsche Bank, Goldman Sachs, JP Morgan Chase et al were conspicuous by their absence so suggesting that these firms have yet to make a significant impression on the UK wealth management market. "This is a marketplace that is increasingly being dominated by international competitors," noted Mr Anderson. "While international private asset management groups - particularly the Europeans and Americans - continue to expand into - and from - the UK, the small number of remaining indigenous firms appear to be holding their own in both performance and service terms."

Clearly, the situation could change dramatically over the next five years or so, especially if there is no let up in industry consolidation as a consequence of merger and acquisition. As a consequence the roll of honour in succeeding PAM Polls could change significantly. Nonetheless, this should do little to impact the status of the PAM Awards, which are increasingly regarded as the definitive benchmark of investment performance and service quality within the wealth management sector.

This is already reflected by the list of sponsors they currently attract. The lead sponsor was Reuters, the world's biggest financial information provider. Co-sponsors included the London International Futures Exchange (LIFFE), PricewaterhouseCoopers, iShares, Schroder Salomon Smith Barney, GCI Financial and Wealth Management.