Seeking investment talent

We explore how Omnis appoints third-party managers to run funds to provide access the best investment talent in the market.

Omnis Investments (Omnis) offers clients of The Openwork Partnership and 2plan Wealth Management a range of 26 funds. They appoint third-party investment managers, allowing investors access to the best talent in the market. No matter how big you are as an investment house, you can’t have the best investment managers for every single asset class – it is Omnis’ job to find the best managers out there.

Investment managers move firms and retire. The Omnis model means the team can decide if and when they need to find a new investment manager and then manage the transition without investors having to buy and sell funds. In other models, if your fund manager leaves, you would sell the fund and switch manually to another one, which can be a lengthy process. It would leave investors uninvested during the period and could sometimes lead to taxation events and charges.

Omnis has the responsibility for making sure investors always know what’s going on in the funds. The team can provide detailed information because they are able to monitor each fund manager, and make sure they are always investing in line with the funds’ investment objectives.

Manager selection

Omnis works with external specialist research firm Fundhouse to make sure it can identify the best investment managers.

There are more than 100,000 funds globally, which is more than the number of listed stocks, so Omnis distils these into a more manageable list and contacts managers to discuss their processes and capabilities.

That list then gets further refined to a shortlist of about five managers. Omnis then asks for more detailed information in writing and meets each team in person to gain an understanding of their investment approach. Omnis now manages more than £10 billion on behalf of its investors, and this size provides the level of access needed to fully assess managers.

Omnis tests each manager’s investment process with the data on other funds they manage to verify the information. A shortlist of investment managers then present to the Omnis Investment, Performance and Risk Committee, which will recommend its preferred investment manager to the Omnis board.

Sustainable investing

Omnis assesses whether the managers are incorporating environmental, social and governance (ESG) factors into their investment decisions. The team sends each potential manager an ESG questionnaire at the start of the selection process. If they don't pass our ESG requirements, they don't progress any further. Omnis looks for examples of how they’re incorporating these sustainability factors, as well as getting a feel for their culture internally.

Incorporating ESG factors into investment decisions is not as straightforward as you might think, and once they are appointed as managers Omnis continually reviews their approach to ESG and reports back to investors.

Ongoing monitoring

Once a manager is appointed, the ongoing monitoring kicks in. Omnis has regular meetings with the managers in person, and access to the portfolios so that the team can see all individual holdings at all times, allowing Omnis to make sure the funds are being run appropriately.

Omnis has launched many new funds over the past few years and the range of high quality, third-party fund managers that it can access continues to expand on performance, they aim to align their funds with the time horizons of investors, focussing on five-year rolling performance. Short-term performance over one week, one month or three months is considered as largely irrelevant in the context of meeting the stated five-year performance target set out in the objectives of the funds.

Although the performance of each underlying fund is important, Omnis does not recommend buying them individually. They should form part of a diversified portfolio to reduce risk and provide exposure to a diverse range of opportunities across asset classes, geographical regions, and industry sectors.

Your adviser will work with you to establish what the correct portfolio of Omnis funds is most suitable to you.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Key takeaways

• Omnis appoints third-party investment managers to run funds because it provides access to the best talent in the market.
• The process for selecting the best managers begins with a global universe of more than 100,000 funds, which are then distilled down using strict criteria.
• Omnis assesses whether managers are incorporating environmental, social and governance (ESG) factors into their investment decisions.