"Historically known for UK equities, but they have diversified their range over the years with, for example, US equities, global SRI and more recently the fixed income team. They have now got a strong set of funds for fund buyers to choose from.
"In our fund of funds we own Artemis IG, Target Return Bond, High Yield and also UK Select."
Jason Hollands, managing director for corporate affairs at Evelyn Partners, says: “Culturally, Artemis is essentially a ‘big boutique’, where each investment team has a lot of autonomy in developing their investment approach rather than being corralled into a single house process or style.
"Among the Artemis fund range, we particularly like the Artemis UK Select fund, managed by Ed Legget and Ambrose Faulks, which is a multi-cap ‘best ideas’ fund that targets undervalued growth companies. Another strong Artemis capability is credit – we like the Artemis Corporate Bond fund, managed by Stephen Snowden.”
McDermott’s highlighting of scope for Artemis to diversify is something Rory Maguire, managing director of Fundhouse UK, notes too. He says part of the issue with Artemis is what he calls “franchise risk”.
This is the fact that a large proportion of the AUM at the company is run by a small number of individuals, and that if either the manager leaves, or the asset class falls from favour, it can have an outsized impact on the wider business.
As the chart above shows, around £9bn of the £17bn in UK wholesale and retail assets is run by just three lead managers: Adrian Frost, Jacob De Tusch-Lec, and Ed Legget.
The first two of those are industry veterans and material shareholders in the company. The funds they run have performed strongly in recent times, most being top quartile, as the value style of investing comes back into vogue.
Another wealth manager, who spoke on condition of anonymity, says one of the issues with Artemis is that, with the exception of some managers that have been at the helm almost since the company was founded, he feels new fund managers have yet to emerge within the business, and wonders why.
One of the challenges this poses for the firm is that if a partner wishes to retire from the company, the usual practice is for a younger employee to buy the retiring partners shares, but if the younger employees have yet to become lead fund managers they may not have the income to do this, leaving retired partners continuing to have influence on the firm.
Liontrust recently negotiated to buy Artemis, but a deal was not completed.
