Having spent her final three years at BlackRock working with retail clients, LGIM came knocking. Ms Solomon explains: “I wasn’t looking, but I had a very persistent headhunter and I thought, ‘what have I got to lose?’. Fifteen interviews later I knew I had uncovered a really good opportunity at LGIM to shape a business.”
She jokes about friends in the industry mocking her for leaving BlackRock to sell index funds at LGIM. Three years later, in light of passives’ rapid elevation in the minds of many retail investors, the decision looks a sensible one.
But Ms Solomon has not given up on active. She stresses that there is still a place for the firm’s fixed income and active equity products, particularly within the discretionary space.
Her desire to shift the retail business away from simply selling passive funds to financial advisers was underlined in 2015-16 by the hiring of industry veterans Simon Hynes and Stephen Gray – the latter joining from Axa Investment Managers to lead sales to the wealth market.
“The intermediary business is pretty much the DNA of our [retail] business. But we weren’t tapping into the wealth market in the same way,” Ms Solomon says.
“Our active fixed income capability is very strong, and on our active equity side it’s about concentrating on those high-conviction concentrated portfolios and talking to clients about the strategies we’ve got.”
The firm’s bricks-and-mortar property fund is another focus. Though LGIM did lower the value of the strategy by 15 per cent during the sector’s slump last summer, unlike its peers it refrained from gating investors – a decision Ms Solomon says has stood it in good stead.
“We have had a lot of momentum in the discretionary and the financial adviser market,” she explains. “The point I get from clients is not just that we remained open, but also that when the going got tough, we remained in touch. That was appreciated and we’re reaping the rewards of that now.”
But lower-cost offerings are taking a growing share of business. LGIM is looking to replicate institutional success with its smart beta franchise in the wholesale space. It is considering bringing across a multifactor fund – Future World – as well as launching single-factor smart beta products.
The company is also hoping to tackle both Vanguard’s growing dominance in the passive multi-asset space, and the popularity of multi-asset absolute return strategies, such as those run by Aviva Investors, Aberdeen Standard Investments and Invesco Perpetual.
