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KBI reports record profits in 2014

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Institutional asset management boutique Kleinwort Benson Investors (KBI) saw its consolidated revenue grow to EUR24.6m at year end 2014, an increase of 58% year on year. 

The Dublin-based firm, which is part of BHF Kleinwort Benson Group SA, has declared an operating profit of EUR7.4 million for 2014, representing an almost threefold increase on 2013 (EUR2.5m).  

KBI’s combined assets under management, across both wholesale and institutional markets, reached EUR6.9 billion at 31 December 2014, an increase of EUR1.5 billion on the 2013 year end (EUR5.4 billion) and EUR3.3 billion on 2012 (EUR3.6 billion), the scalability of the business underlined by the uplift in operating margins, from 16% in 2013 to 30% this year.

KBI is enjoying growing interest in its suite of specialist active equity products – the firm’s flagship Global Equity and Environmental Equity strategies proving increasingly popular with its ever more international investor client base – and continues to manage pension fund assets for some of Ireland’s largest and best-known corporations.  KBI has been particularly successful in growing its share of the North American market, representing almost half of its assets under management today, and boasts a diverse international client base throughout the UK, Europe and Asia.

Whilst KBI’s clients are not typically disclosed, 2014 has seen the firm awarded significant mandates from a number of investors in the public funds arena, including the Los Angeles Fire and Police Pension Fund, the Tulare County Employees’ Retirement Association, Fonds de Compensation (the general pension insurance scheme for Luxembourg, which is thought to be one of the largest active global equity mandates awarded in Europe in recent years by public tender), and the Shetland Islands Pension Fund.  California has proved a particularly rich picking ground for KBI, the firm also listed as one of the reserve managers for both global and emerging market equities for the USD190 billion CalSTRS pension fund, the third largest in the US and one of the largest investing institutions in the World.

KBI’s investment strategies are also distributed through private banks and wealth management groups, in many regions, and have won positive industry endorsement from a number of organisations serving the retail funds marketplace, Morningstar product ratings, the Lipper Fund Awards and Fund Manager of the Year Awards amongst the accolades the firm has received in recognition of its asset management expertise and investment performance over the course of the last twelve months.

Sean Hawkshaw (pictured), CEO at KBI, says: “As a relatively modest sized asset management boutique, based in Dublin, away from the noise of London and New York, it is gratifying to see the momentum we have managed to build over the past two years.  However, our recent success has been a while in the making, and is no overnight success.  We made a bold call ten years ago to grow our business on an international footing, and to offer specialist actively managed equity strategies.  That decision is now starting to pay handsome dividends for the business, our business partners, and most importantly our clients, who having entrusted us with the stewardship of their assets are being rewarded with consistent and outstanding risk-adjusted investment performance over the longer term.

“There have been many twists and turns along the way, but we are fortunate to have built a strong and stable team, across both Asset Management and Client Service.  Many of my colleagues have been with the firm for more than a decade now; the stability and predictability which that delivers is hugely beneficial, has stood us in great stead with the leading consulting firms in particular, and has given us a solid platform for growth.

“As a boutique Irish based firm it’s terrific to be able to take on the big global players and win.  We have to operate to best in class standards on a global footing as each of our client mandates are based on a competitive tender, and unlike many other managers, we don’t rely on an affiliated bank or insurance company to feed assets into the machine.”

KBI has kept the momentum going over the course of the first quarter and in conjunction with BMO Capital Markets has just launched a closed-end fund on the Toronto Stock Exchange.  This fund will invest in a portfolio of stocks in the water infrastructure, technology and utilities sectors, selected by the specialist KBI Environmental Equity team.  The firm has also made a significant move in the massive US mutual funds marketplace with the launch this week of a global resources equity fund in partnership with Virtus Investment Partners, and the pipeline for the year looks strong.  As a result, KBI has added resources at both its Dublin headquarters and in its US offices over the last 18 months, its headcount now approaching 60 persons.

“It’s very satisfying to be able to add additional staff, particularly in our Dublin office, but also in our sales offices in San Francisco, New York and Boston”, says Hawkshaw.  “The additional resources will enable us to continue to deliver for our existing clients, which remains our principal objective, but also allows us to support the business as we continue this growth phase and build assets under management.”

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